Strategic Petroleum Reserve Falls to Four-Decade Low, Crude Oil May Reclaim $90 in the Medium Term

Summary:

The U.S. Strategic Petroleum Reserve (SPR) has fallen to its lowest level since 1983, highlighting persistently tight global energy inventories. Although easing geopolitical tensions have pushed oil prices back to pre-conflict levels, the gradual rebuilding of strategic reserves by major economies is expected to support crude demand over the coming years, keeping oil prices structurally above pre-war levels. From a technical perspective, WTI has stabilized after filling its geopolitical price gap. If $68.45 is confirmed as a medium-term bottom, prices could advance toward the $92.00-$95.00 region.

BUY WTI

EXP

TRADING

71.120

Entry Price

95.800

63.800

69.796 -0.089 -0.13%

0.0

Pips

Flat

63.800

Exit Price

71.120

Entry Price

95.800

Fundamentals

According to the U.S. Department of Energy, the Strategic Petroleum Reserve declined by 5.5 million barrels to 325.7 million barrels, the lowest level since May 1983. The drawdown is part of a previously announced program under which approximately 172 million barrels of crude oil are being released to ease supply shortages caused by the Iran conflict and help lower fuel prices.

Meanwhile, U.S. commercial crude inventories have also continued to decline. Supported by robust crude exports and strong refinery demand, inventory draws have accelerated in recent weeks. Since the Middle East conflict escalated in late February, combined U.S. commercial and strategic petroleum inventories have fallen by approximately 111 million barrels through June 19, leaving total inventories at 743.3 million barrels, the lowest level since 1984.

The continued decline in inventories indicates that the global supply buffer has weakened considerably. Although Brent and WTI have largely surrendered the geopolitical risk premium accumulated during the conflict, inventory levels have yet to recover. Whether through U.S. SPR replenishment or strategic stockpiling by other major consuming nations, additional demand is likely to emerge, providing medium- to long-term support for crude oil prices.

As a result, market attention is gradually shifting from geopolitical risk premiums toward the global inventory rebuilding cycle. If a new replenishment cycle unfolds, oil prices are unlikely to remain depressed for an extended period and may once again become a major driver of global inflation. Persistently elevated energy costs could therefore keep inflation above pre-conflict levels for years to come.

Strategic Petroleum Reserve Falls to Four-Decade Low, Crude Oil May Reclaim $90 in the Medium Term_1

Technical Analysis

On the daily chart, WTI has successfully filled the price gap created during the Iran conflict on February 28, with prices subsequently stabilizing around $68.45, indicating that selling pressure is gradually fading.

The market has now moved back above the gap area. If $68.45 is confirmed as a medium-term bottom, the previous decline is more likely to be viewed as a corrective pullback within the broader uptrend rather than the start of a new bear market. Based on the measured-move projection from the previous consolidation range, a breakout from the current trading range could open the door for a rally toward the $92.00-$95.00 area, laying the foundation for further medium-term gains.

Momentum indicators also support a constructive outlook. The Stochastic Oscillator continues to trend higher and is approaching overbought territory, suggesting that bullish momentum is strengthening. However, given its elevated reading, short-term consolidation or a pullback to confirm support cannot be ruled out.

Meanwhile, the Relative Strength Index (RSI) continues to rise while remaining below overbought territory, indicating that there is still room for further upside as long as buying interest persists.

The $68.45 level remains the key technical pivot. A decisive break below this support and the ascending trendline would invalidate the current bullish scenario and could trigger another wave of selling toward the May lows or even lower.

Overall, supported by tightening inventories and the prospect of strategic reserve replenishment, WTI's medium-term bullish outlook remains intact. While short-term consolidation may continue, maintaining support above $68.45 favors a buy-on-dips strategy, with medium-term upside targets remaining focused on the $92.00-$95.00 region.

Trade Recommendation

Direction: Buy

Entry Price: 70.00

Target Price: 95.80

Stop Loss: 63.80

Valid Until: 2026-07-29 23:55

Support: 68.46, 67.22, 63.56

Resistance: 72.31, 75.76, 77.89

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