WTI remains under pressure after a sharp decline toward the $69.70-70.30 per barrel area. Oil has almost erased the premium priced in due to the conflict around Iran, as the market has started to factor in recovering flows through the Strait of Hormuz and a lower risk of an immediate supply shortage.
At the same time, the geopolitical premium has not disappeared completely, as shipping security agreements remain fragile.
US inventories and demand
The latest EIA report for the week ending June 19 showed a 6.1 million barrel drop in US crude inventories to 412.1 million barrels, a larger decline than expected. Stocks at Cushing fell by 1.1 million barrels to 19 million barrels. This is a supportive factor for WTI, but the market reaction was limited due to rising gasoline and distillate inventories, as well as lower gasoline demand at 8.8 million barrels per day.
Supply and geopolitics
The main bearish factor now is the improvement in physical oil flows from the Persian Gulf. According to Goldman Sachs estimates, regional exports have recovered to around 63% of normal levels, while more tankers are again moving through Hormuz and switching on tracking systems. Additional pressure comes from expectations of higher OPEC+ supply and a partial recovery in Venezuelan exports.
Technical picture from the current move
After moving below $72, WTI entered a correction phase, with the $70 area becoming the key short-term reference point. If the price consolidates below $69.50, sellers may increase pressure toward $67.50-66.00. For recovery, buyers need to push prices back above $72.00 and then break $74.00, where the nearest resistance area after the sell-off is located.
Conclusion
In the short term, the balance is tilted in favor of sellers despite a sharp drawdown in US crude inventories. The market is reacting more to the fading geopolitical premium and recovering supply, as noted repeatedly, including in WTI remains under pressure as geopolitical premium fades, than to locally bullish EIA data. The base scenario assumes WTI trading in the $69.50-72.00 range, where a break below the lower boundary would increase the risk of a move toward $66.00, while a return above $72.00 would suggest that the sell-off is losing momentum.
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