WTI crude is trading near $77 per barrel, recovering modestly after a sharp decline toward the $75 area. The hourly chart shows prices stabilizing above recent lows, with short-term moving averages beginning to flatten.
However, WTI remains below the 100 and 200-period moving averages, indicating that the broader trend has yet to turn decisively higher. A sustained move above $78.50 to $80.00 would strengthen the technical outlook, while a break below $75.00 could expose another leg lower.
Middle East developments revive geopolitical risk premium
Oil traders remain highly focused on the Middle East after Iranian media outlet Fars News reported that Yemen's Houthi movement is expected to announce a large-scale military operation. The report has increased concerns that attacks on shipping or energy infrastructure could intensify, particularly around the Red Sea and nearby maritime routes. While the report has not been independently confirmed, the possibility of additional disruptions has supported a renewed geopolitical risk premium in crude markets. At the same time, recent attacks on Saudi-linked oil tankers and continuing uncertainty surrounding shipping through the Strait of Hormuz have kept volatility elevated.
Supply data limit the upside
Despite geopolitical concerns, the supply outlook remains a moderating factor for prices. U.S. inventory trends and broader supply expectations continue to suggest that physical markets are becoming more balanced. The Energy Information Administration expects oil inventories to recover later this year as Middle Eastern production and exports gradually normalize, although inventories are likely to remain relatively tight in the near term. Investors are also watching upcoming U.S. inventory data for signs of whether refinery demand and export activity continue to offset production growth.
Macro outlook keeps traders cautious
Broader macroeconomic conditions remain another key driver for WTI. Investors are awaiting U.S. labor market data and other economic releases that could influence Federal Reserve policy and the outlook for fuel demand. A resilient U.S. economy would support oil consumption, while signs of slower growth could weigh on demand expectations.
For now, as I noted in WTI remains vulnerable as rebound fails to reverse bearish trend, the market remains caught between geopolitical uncertainty that supports prices and improving supply expectations that continue to cap sustained upside.
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