WTI traded near $65.95 on Tuesday, down 0.68% on the day, after hitting a six-month high of $67.23 on Monday. Prices eased as investors weighed Middle East risks against signs that demand could weaken.
US–Iran tensions stayed in focus. Talks are set to continue this week in Geneva, alongside rising US political and military pressure. Iran also held naval drills in the Strait of Hormuz, a key route for about 20 million barrels per day. That increased fears of a supply disruption.
Inventory Outlook And Supply Balance
The EIA expects global inventories to rise because production growth is outpacing consumption. It forecasts stockpiles will build by an average of 3.1 million barrels per day this year, which is higher than the increase expected in 2025.
Trade worries also returned after the US administration signaled new national-security tariffs. This followed a Supreme Court decision that struck down some earlier levies. Officials also mentioned a possible 15% global tariff, adding to concerns about global growth and energy demand.
On the 4-hour chart, WTI was $65.97. It was above the 50- and 100-period SMAs near $64.50–$64.00, and the RSI slipped to 53 after previously being above 70. Resistance is near $67.00. Support sits at $66.20–$65.90, then $64.50 and $63.50.
Looking back at this time last year, WTI was trading near $66 as markets debated geopolitics versus demand. Middle East tensions supported prices and helped push crude into the mid-$70s by the second half of 2025. With WTI now near $71 on February 25, 2026, it’s clear that steady supply discipline mattered more than the demand risks many feared.
The large supply glut the EIA predicted in early 2025 never fully happened. OPEC+ kept production cuts in place through last year, which helped set a floor when prices fell. The latest EIA data this month shows US crude inventories have actually dropped by 2.1 million barrels over the past four weeks, against typical expectations for builds at this time of year.
Demand Signals And Macro Headwinds
Global growth concerns that emerged in 2025 have proven real, and they continue to cap oil’s upside. For example, Eurozone manufacturing PMI contracted again in January 2026, while Chinese import growth has been flat. This leaves the market in a tough spot: supply is tight, but demand is not accelerating.
With tight supply but weak demand, we expect oil to trade in a range in the coming weeks. One possible approach is to use options to sell volatility, such as an iron condor, around the current price. This could mean selling a call spread with a cap near $76 and a put spread with a floor near $67, aiming to profit if crude stays within that band.
Technically, the strong uptrend from early 2025 has shifted into a more sideways market. Today’s daily chart shows price moving between the 50-day and 200-day moving averages, which signals uncertainty. Because of that, a move toward the top of the proposed range near $76 may be a chance to set up the bearish side of the strategy.
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