WTI started the week higher, reversing part of Friday\u2019s fall, and traded below the mid-$94.00s. It was up nearly 1.0% on the day amid concerns about global supply.<\/p>\n
US-Iran talks showed little progress after US President Donald Trump cancelled a planned Islamabad visit by envoys Steve Witkoff and Jared Kushner, while Iran\u2019s Foreign Minister Abbas Araqchi arrived in Pakistan. Issues include the Strait of Hormuz blockade, keeping geopolitical risk elevated.<\/p>\n
Traffic through the Strait of Hormuz remained largely blocked due to Iran\u2019s movement restrictions and a US naval blockade of Iranian ports. These conditions supported prices, though a firmer US Dollar limited further gains.<\/p>\n
Markets priced an over 80% chance that the US Federal Reserve keeps rates at the current range in 2026. That supported the US Dollar and reduced support for dollar-priced commodities.<\/p>\n
WTI is a US crude benchmark, also described as \u201clight\u201d and \u201csweet\u201d, and is distributed via the Cushing hub. Its price is driven by supply and demand, geopolitical disruptions, OPEC decisions, US Dollar moves, and weekly inventory reports from API and EIA, which are within 1% of each other 75% of the time.<\/p>\n
With WTI crude holding above $94 a barrel, we see the current geopolitical tension in the Strait of Hormuz as the primary driver for prices. The lack of progress in US-Iran talks suggests this supply risk will not disappear quickly. Traders should therefore be positioned for continued upside, viewing any dips as buying opportunities.<\/p>\n
The threat to the Strait of Hormuz cannot be overstated, as over 20 million barrels of oil pass through the chokepoint daily, representing about 21% of global petroleum consumption. Any prolonged blockade could easily push prices well into the triple digits. We should closely monitor naval movements and diplomatic statements from both sides for any sign of escalation.<\/p>\n
However, a strong US dollar is acting as a significant headwind, capping immediate gains for the commodity. With the March CPI print coming in at 3.5%, the market has correctly priced in over an 80% chance that the Federal Reserve will hold rates steady through 2026. This monetary policy stance will likely keep the dollar supported and prevent a runaway price surge for now.<\/p>\n
Inventory data continues to support a bullish outlook, reinforcing the idea of a tight market. Last week’s EIA report showed a surprise inventory draw of 3.1 million barrels, defying expectations for a small build. We will be watching this Wednesday’s report for confirmation of this trend, as another significant draw would likely push prices toward the key $95 resistance level.<\/p>\n
Given this setup, buying call options with strike prices above the $95 mark for May and June contracts appears to be a prudent strategy. This allows for participation in the expected upside once the psychological barrier is broken. We see a move toward the $98-$100 range as highly probable if the Hormuz situation remains unresolved.<\/p>\n
We remember the price spike to over $100 in late 2025 during the initial naval blockade, which shows how quickly the market can react. Therefore, while our bias is bullish, it is wise to consider hedging long positions with out-of-the-money puts. A sudden diplomatic breakthrough could cause a sharp reversal, and traders must be prepared for that possibility.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" WTI rebounds nearly 1% as Hormuz disruptions and stalled US-Iran talks lift supply fears, stronger dollar caps.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-48698","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t