Insights 
VT 
West Texas Intermediate (WTI) Crude Oil experienced a sharp decline, dropping over $10.00 per barrel this week. This accounts for a 12% decrease, the largest since March 2023, with WTI now trading below $65.00 per barrel.
Concerns about supply disruptions in the Strait of Hormuz initially fuelled a rally near $77.00, but eased geopolitical tensions have stabilised the market. A Reuters report, citing Goldman Sachs, suggests only a 4% chance of disruption, keeping WTI within a $60–$69 range.
Opec Production Impact
Despite the Energy Information Administration’s report of reduced US inventories, its impact was muted. OPEC is poised to increase production by 411,000 barrels per day in July, leading to a cautious market.
On a technical level, WTI is supported near the 38.2% Fibonacci retracement at $64.18, with further support expected at the $64.00 mark. Resistance levels include the 100-day Simple Moving Average at $65.45 and the 200-day SMA at $68.29, with the RSI indicator showing a slight bearish trend.
WTI Oil, a high-quality crude oil predominantly traded in US Dollars, is affected by supply-demand dynamics, global growth, and geopolitical events. OPEC’s production quotas have a direct effect on WTI prices.
The recent sharp move in WTI Crude, with prices dropping by over $10 per barrel, speaks volumes about the sensitivity of commodity markets to shifting narratives. A 12% drop in under a week is not just another fluctuation — it’s a response to cooling fears that were initially stoking bullish sentiment. Just days ago, tensions around the Strait of Hormuz had some participants bracing for supply shocks, pushing WTI towards the $77 threshold. Since then, updated risk assessments, such as the Goldman report estimating only a 4% chance of disruption, have quickly drained that enthusiasm, sending prices into retreat.
Current Market Dynamics
The headlines about US inventories offered little in the way of balance. While there was a reduction, the market wasn’t particularly interested in that data. One might have expected tighter supply to cushion the fall, yet the anticipated move by OPEC to boost production next month added another layer of pressure. Their 411,000 barrel-per-day increase suggests a willingness to test market demand, even at these lower price points.
From a trading perspective, the technical zones are incredibly well-defined right now. Support near the 38.2% Fibonacci retracement — right around $64.18 — has been holding up. If that gives way, the psychological $64 level could come into play fast, and any dip below might accelerate sell-offs, given the clustering of stops in the region. On the resistance end, the 100- and 200-day SMAs at $65.45 and $68.29, respectively, should be monitored closely. They acted as magnets during previous rebounds and will likely influence short-term positions again.
The RSI is falling, though not yet at extremes. That detail alone could mean further downside is not off the table. Volatility may remain compressed after this initial flush, but it’s far from a reset — more likely, it’s a breather.
With increased supply scheduled and current tensions no longer pushing pricing higher, the next few weeks could be about extracting premium from mean reversion rather than chasing breakout trades. Every increase in volume or short-term volatility spike ought to be examined closely for entry points around those well-watched technical markers.
The broader elements — including global economic indicators and output coordination among major producers — continue to set the tone. But in the near term, focus stays locked on whether that support just below $64 holds. There is currently no catalyst in sight that justifies any strong directional bias – certainly not until fresh geopolitical headlines or inventory shocks emerge.
We’ll be looking not just at price action, but also positioning and open interest metrics. The current levels are a test, but not a collapse. Reaction around this band will offer insight into whether the move was exhaustion or the start of a larger directional turn.
