WTI held near a three-week low on Wednesday, trading around $74 a barrel as markets waited for confirmation that commercial shipping through the Strait of Hormuz will resume. Iran and Oman have agreed the geographic coordinates for a proposed shipping route, while Iran\u2019s Foreign Ministry said a joint statement is in the final stages of review and drafting, subject to non-interference by \u201cthird parties\u201d. A separate report said any Iran\u2013Oman understanding would not in itself reopen the Strait, with additional arrangements required, including the fulfilment of US commitments.<\/p>\n\n
In the US, EIA data showed crude inventories rose by 2.479m barrels versus expectations for a 1.5m-barrel fall, after a 7.167m-barrel decline the week before. Technically, WTI remains below the 21-day, 50-day and 100-day SMAs, while RSI sits around 42 and MACD remains below zero. Resistance is seen at the 50-day SMA near $79.58 and the 21-day SMA at $80.27, with the 100-day SMA at $87.43; support lies in the $67.00\u2013$70.00 zone.<\/p>\n\n
We advise derivative traders to exercise extreme caution in the coming weeks as WTI hovers around $74 while waiting for updates on the Strait of Hormuz. Because any sudden breakdown in shipping negotiations could trigger a sharp price spike, we should avoid uncovered short call positions. Instead, utilizing limited-risk bear put spreads allows us to capture the downward trend while hedging against sudden geopolitical shocks.<\/p>\n\n
The technical indicators strongly favor sellers, with WTI trading well below its 50-day moving average of $79.58 and its 100-day average of $87.43. We expect the price to drift lower toward the key support range of $67.00 to $70.00 if the shipping agreement is finalized. For short-term futures traders, we suggest establishing short positions with strict stop-losses placed just above the 21-day moving average of $80.27.<\/p>\n\n
This bearish view is reinforced by the EIA’s recent report of a surprise 2.479 million barrel increase in US crude inventories, which missed the expected 1.5 million barrel drop. Furthermore, recent market data shows US field production of crude oil remains incredibly strong, averaging over 13.2 million barrels per day in 2026 to keep global supply highly resilient. Historically, when physical oversupply aligns with negative technical indicators, crude prices face sustained downward pressure.<\/p>\n\n
Because geopolitical uncertainty is keeping option implied volatility elevated, we can look to sell out-of-the-money call spreads to collect rich premiums. This strategy allows us to profit from time decay while keeping a safe distance from the heavy resistance levels near $80. We must remain flexible, as an official signature on the Hormuz shipping deal will likely spark a fast drop toward the $67 support floor.<\/p>\n\n\n\n