WTI climbed almost 6% to just above $91.00 in the North American afternoon, while Brent rose almost 5% towards $95.00, returning both benchmarks to early-June levels. The rally was one-way, with dips absorbed within minutes, and futures trading through the spot tape pointed to repricing rather than a brief reaction. Thursday\u2019s move contrasted with Monday\u2019s volatility, when WTI spiked just above $84.00, slid through $79.50 and then rebounded to test $83.00.<\/p>\n
WTI rose from around $86.50 to above $91.00 and Brent advanced from roughly $90.50 to a test of $95.00, with pullbacks of about $1 and repeated overbought readings on the Stochastic oscillator. On the daily view, WTI was more than a third above its early-July low near $67.00 after barely three weeks, while the WTI front-month neared $92.00 and Brent\u2019s front-month moved back above $100.00 for the first time since May. The backdrop included Gulf exports at roughly half their pre-war rate, Strait tanker traffic at a fraction of normal, reimposed sanctions on Iranian barrels, and a US Strategic Petroleum Reserve at its lowest level since 1983, alongside technical levels at $91.00 and $95.00 resistance, then $104.00, $107.00 and $100.00, with support at $86.50, $85.00, the 50-day EMA near $81.00 and Brent\u2019s equivalent near $85.50.<\/p>\n
We are seeing a major shift in how the oil market behaves, moving away from temporary headline spikes to a permanent structural repricing. With WTI climbing past $91 and Brent testing $95, the steady upward momentum shows that buyers are aggressively absorbing any minor pullbacks within the hour. Derivative traders must stop trying to short this rally, as the market is no longer treating these geopolitical risks as temporary noise.<\/p>\n
This price surge is backed by severe physical supply constraints, especially since the Strait of Hormuz normally carries over 20 million barrels per day, representing about 20% of global petroleum consumption. Additionally, the U.S. Strategic Petroleum Reserve remains near its lowest level since 1983 at around 375 million barrels, leaving almost no buffer to cool down the market. We believe these physical shortages mean that a permanent war premium is being actively built into the pricing structure.<\/p>\n
For the coming weeks, we recommend that derivative traders maintain a strong bullish bias and focus on buying calls rather than trying to time the top using overbought indicators. Historically, when Brent climbs back over the $100 mark during geopolitical supply shocks, the upward momentum can quickly accelerate toward multi-year highs. We should look to enter long positions on any shallow pullbacks, using the immediate WTI support floor of $86.50 as our guide.<\/p>\n
As long as WTI holds above this $86.50 area, we expect prices to challenge the next major resistance at $95.00, with a clear path toward the April peak near $107.00. However, we must stay alert for a daily close below the $85.00 handle, which would be our signal that speculative, erratic volatility has taken back control of the tape. Until that key support breaks, we advise trading the physical trend and avoiding the temptation to fight this powerful upward move.<\/p>\n\n\n\n