West Texas Intermediate (WTI) crude oil prices rebounded on Thursday, rising more than 2% to trade around $71.50 and snapping a three-day losing streak. This uptick was attributed to short covering following a recent selloff that pushed prices to their lowest levels in over three months [1]. Despite the rebound, WTI remains near levels last seen at the start of the US-Iran war, as improving traffic through the Strait of Hormuz has eased some supply concerns [1].
The situation in the Middle East remains fluid. Iran has stated that only routes designated by Tehran are permitted for transit through the Strait of Hormuz, requiring vessels to obtain approval from the Islamic Revolutionary Guard Corps (IRGC) before entering. Iranian authorities have reportedly turned back ships attempting to use a new southern route. Additionally, reports of a vessel being struck off the coast of Oman have revived some geopolitical risk premium [1].
US Secretary of State Marco Rubio downplayed Iran's plans to impose transit tolls in the Strait of Hormuz, stating there is 'zero support among Gulf countries for tolling in Hormuz' [1]. Analysts at TD Securities, Ryan McKay and Bart Melek, noted that crude oil flows through the Strait are gradually normalizing, although approximately 10-11 million barrels per day of Middle Eastern production remain offline. They added that without a swift recovery in Middle East production, continued inventory draws and bloated short positioning could set the stage for a recovery in crude oil prices [1].
Energy Information Administration (EIA) data released Wednesday showed US crude stockpiles fell by 6.088 million barrels last week, exceeding expectations for a 5.1 million-barrel decline but less than the previous week's 8.262 million-barrel draw [1]. Technical analysis indicates WTI maintains a bearish near-term bias, trading below the 200-day Simple Moving Average (SMA) at $73.02, with immediate support at $70.00 and resistance at $73.02, $75.00, and $80.00 [1].
CONCLUSION
WTI crude oil prices have rebounded amid easing supply concerns in the Strait of Hormuz and ongoing geopolitical tensions. While flows are gradually normalizing, significant Middle Eastern production remains offline, and analysts suggest that continued inventory draws could support a price recovery. Technical indicators point to a bearish bias, but the pace of the recent selloff may be moderating.