WTI Crude Oil experienced a significant rally on Tuesday, climbing approximately 3.3% and approaching the $100 mark in spot markets. The session saw a high near $99.40 before consolidating around $98.70, just below the triple-digit threshold. This surge followed President Trump's rejection of Tehran's latest peace proposal, which he described as 'garbage,' and his warning that the current ceasefire was on 'life support.' Reports indicate Trump is preparing to meet with his national security team to discuss potential renewed military action and the possibility of escorting commercial vessels through the Strait of Hormuz, further diminishing prospects for a near-term reopening of the critical waterway [1].
Saudi Aramco CEO Amin Nasser highlighted the severity of the supply disruption, stating that the global market is losing roughly 100 million barrels of supply each week. He cautioned that a return to normal conditions could be delayed until 2027 if the disruptions persist [1]. The ongoing closure of the Strait of Hormuz has heightened concerns about US crude supply tightness, with traders awaiting Wednesday's Energy Information Administration (EIA) inventory report for further clarity. Last week's EIA data showed a lighter-than-expected draw of 2.3 million barrels, compared to forecasts of 3.3 million barrels [1].
Technical analysis reveals that WTI US Oil maintains a bullish near-term bias, trading at $98.30 on the fifteen-minute chart and $98.66 on the daily chart. Prices remain well above key support levels, including the day's open at $95.14, and above the 50-day and 200-day exponential moving averages at approximately $90.30 and $74.81, respectively. The Stochastic RSI indicates neutral-to-moderate momentum, suggesting consolidation rather than a decisive reversal at this stage [1].
Market participants are also monitoring this week's US-China dialogue for any indications that Beijing might pressure Tehran to accept Washington's terms. Additionally, Wednesday's US Producer Price Index (PPI) release is expected to provide insights into the oil shock's impact on inflation [1].
CONCLUSION
WTI Crude Oil's rally reflects heightened geopolitical tensions and supply concerns following President Trump's rejection of Iran's peace proposal and ongoing disruptions in the Strait of Hormuz. With prices nearing $100 and supply losses mounting, the market remains bullish, awaiting further data from the EIA and developments in US-China relations. The outlook is increasingly uncertain, with potential for continued volatility if disruptions persist.