WTI crude oil prices dropped after reaching $75.54, as geopolitical tensions eased. Diplomatic discussions between Iran and EU diplomats in Geneva helped calm fears regarding the Strait of Hormuz, a vital route for oil shipments. Currently, WTI crude oil is trading at around $73.80 per barrel. President Trump has postponed a decision on US military involvement, redirecting market focus back to supply fundamentals.

US Inventory Data

Recent US inventory data added to the bullish sentiment, reporting a draw of 10.13 million barrels by the API and an even greater drop of 11.47 million barrels by the EIA. This reduction in inventories suggests tighter supply conditions. On the technical side, WTI remains above key Simple Moving Averages, with initial support at $72.00 and resistance at $75.54. The Relative Strength Index indicates slightly less overbought conditions. WTI oil, produced and used in the US, serves as a market benchmark. Its price is influenced by global growth, political issues, and OPEC decisions, all impacting supply and demand. Inventory reports from the API and EIA affect WTI prices. A decline in inventories indicates rising demand, which could lead to higher prices, while an increase suggests the opposite. Recently, oil price movements have shifted from reacting to geopolitical news to focusing on fundamental supply and demand. The easing of tensions in crucial maritime areas, particularly near the Strait of Hormuz, followed diplomatic talks between Iranian officials and EU representatives in Geneva. This dialogue created a temporary sense of calm, allowing market sentiment to shift away from immediate disruption risks. Prices previously peaked at $75.54 but have since dipped, with WTI currently around $73.80 per barrel. The US President’s decision to delay military action has shifted attention back to inventory levels and production rather than immediate conflict concerns. While not eliminating all risks, this pause has reduced the urgency of risk premiums in crude oil.

Recent Inventory Reports

It’s evident that US inventory figures have been telling. The Energy Information Administration reported a draw exceeding 11 million barrels, surpassing the already significant draw projected by the American Petroleum Institute. When actual withdrawals exceed expectations, it often means we need to reevaluate supply and demand, especially in light of production and refining rates. Technical levels remain strong. With prices above major moving averages, there are signs that bullish sentiment persists. A support zone near $72 serves as a buffer, while the $75.54 level remains a key resistance point. For those monitoring momentum, the RSI shows less congestion, indicating potential room for new buying interest. It’s important to observe how the commitment from market players changes with each inventory report. Large draws, like those over 10 million barrels, prompt us to think about whether demand is outstripping supply or if shipping problems and refinery capacities are more significant than assumed. As strategies are adjusted based on these conditions, aligning technical levels with inventory expectations becomes crucial. Consecutive large draws can lead to spikes in options volatility as data releases approach, creating potential entry or hedge opportunities. Additionally, discrepancies between spot and futures prices during these times may require adjustments to rolling strategies, especially near expiry dates. This month, tracking inventory trends is more critical than responding to diplomatic news. Monitoring margin requirements, roll yields, and implied volatility in the options market—particularly at the $72 and $75 levels—will be vital for predicting future momentum. Traders should integrate EIA and API reports into fixed calendars and watch for changes in open interest for directional insights. Create your live VT Markets account and start trading now.

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