WTI Falls to Four-Month Low as Supply Outlook Improves

Traders' Opinions

Summary:

WTI crude slipped to its lowest level since late February as improving Middle East oil flows and expectations of rising global supply outweighed geopolitical concerns, keeping sellers firmly in control.

SELL WTI

EXP

PENDING

68.300

Entry Price

52.000

74.000

70.189 -1.096 -1.54%

Pips

PENDING

52.000

Exit Price

68.300

Entry Price

74.000

West Texas Intermediate (WTI) crude oil remained under pressure during Friday's European session, with prices slipping to around $69.65 per barrel, the lowest level since late February before the joint US-Israel military action against Iran. The latest decline extends a sharp multi-week selloff, with crude now down more than 30% from its late-May peak as traders increasingly focus on improving supply conditions rather than geopolitical risks.

Market sentiment has shifted notably over the past week as the gradual reopening of the Strait of Hormuz and expectations of stronger exports from major Middle Eastern producers continue to ease fears of prolonged supply disruptions. While geopolitical tensions have not disappeared entirely, investors appear increasingly confident that global crude flows are steadily returning to normal.

US Energy Secretary Chris Wright added to the bearish outlook by stating that oil shipments through the Strait of Hormuz have recovered to pre-conflict levels, with roughly 20 million barrels moving through the strategic waterway on Wednesday alone. The recovery has reinforced expectations that one of the world's most important energy corridors is returning to normal operations after months of disruption.

Supply expectations have also improved outside the Gulf region. Wright noted that Venezuelan crude exports, now administered by the United States following the removal of former President Nicolas Maduro, have increased significantly and could potentially double before the end of President Donald Trump's current term in 2029. The prospect of additional Venezuelan barrels reaching global markets has further strengthened expectations of a more balanced supply outlook.

Although analysts acknowledge that it could still take several weeks before global oil logistics fully normalize following the nearly three-month closure of Hormuz, markets are already pricing in a substantial recovery in available supply. Additional Iranian exports, made possible by Washington's temporary sanctions waiver during the ceasefire period, are also expected to contribute to rebuilding global inventories.

Technical Analysis

WTI crude oil remains firmly bearish on the 4-hour chart, with price trading near $69.30 after extending its decline below the key $70.00 psychological level. The broader structure continues to favor sellers, as crude has been forming a clear sequence of lower highs and lower lows since rejecting the $96.00–$100.00 resistance region earlier in the quarter.

The latest breakdown is technically significant because $70.00 had acted as a major support floor. Now that price is trading around this level, any weak recovery toward $70.00–$72.00 may attract fresh selling pressure unless buyers can reclaim that zone decisively.

On the downside, the next major target sits around $56.00–$57.00, which aligns with the projected bearish move on the chart. A sustained break below that region would expose deeper losses toward $52.00–$50.00.

On the upside, WTI would need to recover above $72.00 to ease immediate bearish pressure. A stronger break above $80.00 would be required to invalidate the broader downside structure.

Momentum remains negative, with the market consolidating near recent lows rather than showing a meaningful bullish reversal. The current pause looks more like continuation selling than accumulation.

TRADE RECOMMENDATION

SELL WTI CRUDE OIL

ENTRY PRICE: 68.30

STOP LOSS: 74.00

TAKE PROFIT : 52.00

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