WTI crude is down about 1% to just under $79.00 after a third failure at $80.00, where the 50-day Exponential Moving Average sits just above the level, while the rebound from early July\u2019s low near $67.00 has stalled with the daily Stochastic Relative Strength Index still rising. Escalation around Iran has included a US strike on a tanker near Iran\u2019s main export terminal, renewed naval pressure on Iranian ports, and Iranian fire towards US bases in Kuwait and Jordan. Washington has floated a 20% transit toll for protected Strait of Hormuz cargo and revoked a waiver covering Iranian crude and petrochemicals, yet prices have struggled to hold $80.00 after WTI previously traded above $107.00 before falling back to $67.00 within a fortnight; June\u2019s average was more than $20.00 below May as tanker traffic resumed.<\/p>\n
Supply conditions remain loose: US output is near 13.5 million barrels per day, while Brazil, Guyana and Canada are adding barrels, and agencies project a surplus into late 2026 against demand growth near 1.2 million barrels per day. OPEC cohesion has weakened, with the UAE exiting in April, and spare capacity concentrated in Saudi Arabia and Gulf allies continues to cap rallies, even as firm demand feeds inflation and keeps central banks hawkish. Risk focus has shifted to Yemen, with Saudi strikes on Sanaa\u2019s airport and Houthi missile launches towards Abha; Bab al-Mandab, carrying roughly a tenth of seaborne crude trade, could be used to disrupt routes. Technically, resistance sits at $80.00 then $82.00 and $84.00, support at $78.00 then the 200-day Exponential Moving Average below $77.50 and $76.00; a daily close above $80.50 would alter the near-term bias.<\/p>\n
We should adopt a bearish bias in the coming weeks and look to sell rallies as West Texas Intermediate (WTI) struggles to break above the $80.00 ceiling. Despite intense geopolitical headlines, the market has repeatedly failed to hold this level, proving that traders are no longer willing to pay a “fear premium” without actual physical oil supply disruptions. We recommend focusing on short positions near the 50-day Exponential Moving Average just above $80.00, keeping a tight stop-loss above $80.50 where the bias would flip to bullish.<\/p>\n
Our bearish outlook is heavily supported by a loosening global supply, led by American production holding strong near record highs of 13.5 million barrels per day. Combined with expanding output from Brazil and Guyana, global supply is comfortably meeting a demand growth of 1.2 million barrels per day, leaving the market in a clear surplus. Energy Information Administration (EIA) data historically shows that when non-OPEC production surges to these levels, geopolitical tensions rarely sustain price spikes without physical blockades.<\/p>\n
For our downside targets, we should watch the $78.00 support level closely before eyeing the 200-day Exponential Moving Average near $77.50. If these levels break, we expect WTI to test the $76.00 mark as macroeconomic pressures, including a potentially hawkish Federal Reserve meeting on July 28-29, weigh on dollar-priced commodities. These technical floors should serve as our primary take-profit zones for short derivatives.<\/p>\n
While we remain short, we must actively hedge against the severe threat of a successful strike on Saudi Arabian oil infrastructure. We must remember the September 2019 Abqaiq-Khurais attacks, which instantly knocked out 5.7 million barrels per day\u2014about 5% of global supply\u2014and sent crude prices surging over 14% in a single session. If the Houthis successfully target Saudi processing facilities or shut down the Bab al-Mandab Strait, which carries nearly 10% of global seaborne crude, we must immediately pivot and chase the upside.<\/p>\n\n\n\n