WTI rose above $100.00 on Friday and reached $100.05, setting new weekly highs after a two-day meeting between Donald Trump and Xi Jinping. Trump said China agreed to buy US crude, while Chinese authorities had not confirmed this at the time of reporting.
The meeting ended without specific plans to reopen the Strait of Hormuz. Trump also said China was committed to reopening the waterway, but gave no further detail.
On the 4-hour chart, the Relative Strength Index was 64.22 and the MACD moved back into positive territory. If WTI holds above $100, the next levels cited were $103.80 and $107.35.
Support levels listed were $95.11, then $90.90, and a band between $86.90 and $87.55. The technical section was produced with help from an AI tool.
WTI (West Texas Intermediate) is a US-sourced crude benchmark, described as “light” and “sweet”, and is distributed via Cushing. Prices are driven by supply and demand, global growth, geopolitical disruptions, OPEC decisions, and the US Dollar.
API and EIA weekly inventory reports can move prices; their results fall within 1% of each other 75% of the time. OPEC has 12 member nations and sets production quotas at twice-yearly meetings; OPEC+ adds ten non-OPEC members, including Russia.
With West Texas Intermediate crude breaking the $100 psychological barrier, the immediate focus is on the sustainability of this rally. The move is fueled by promises of Chinese purchases of US oil, but we must be cautious as Beijing has not yet confirmed this commitment. This uncertainty creates a prime environment for volatility in the coming weeks.
For traders expecting follow-through on this momentum, buying call options with strike prices near the $103.80 and $107.35 levels could be a direct way to profit. The technical indicators are currently supportive of this upward trend. This strategy allows for defined risk while capturing potential upside if the news is confirmed or if other bullish catalysts emerge.
However, we must remember the market’s reaction to similar unconfirmed political statements back in 2025, which often led to sharp reversals. Buying put options with strikes around the $95.11 support level offers a hedge against long positions or a way to speculate on a downturn if China denies the oil deal. The lack of a concrete plan for the Strait of Hormuz also remains a source of underlying tension that could swing prices either way.
Fundamentally, the market remains tight, lending credibility to the current price strength. The most recent Energy Information Administration (EIA) report showed a draw in US crude inventories of 2.5 million barrels, indicating solid demand. This comes as OPEC+ has largely maintained production discipline throughout the past year, keeping supply in check.
Given the conflict between a strong but unverified headline and tight underlying fundamentals, trading the volatility itself is a sound strategy. Buying a straddle, which involves purchasing both a call and a put option with the same strike price and expiry, would position a trader to profit from a significant price move in either direction. We expect implied volatility to remain elevated until there is official clarification from China.
