The supply situation is already not good. Inventories for U.S. crude oil also were down and OPEC’s crude oil production has declined significantly as a result of the blockade and reduced production from the Gulf. These factors contribute to higher oil prices in the short term. If the war continues and energy supplies remain limited, then the price of Brent and WTI might remain high. But any indication of a peace deal or the reopening of the Strait would cool down the oil prices.
WTI Oil Technical Analysis – $97.50 Breakout May Open Path to $105
From a technical perspective, the recent rally in WTI crude oil was driven by strong support of $87 that pushed WTI to $93.40. Therefore, the rebound was highly expected. WTI prices have been consolidating within the triangle pattern as seen by the black dotted trend line between the $87 and $97.50 levels.
The prices are compressing at the edge of this triangle. A break of this zone will likely define the next move in the WTI crude oil market.
Overall, WTI prices have been trading within $120 and $80 after the U.S.-Iran war. This keeps strong volatility in the oil market.