WTI sticks to modest gains above $94.00 as Hormuz standoff fuels supply concerns
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WTI regains positive traction on Monday amid the lack of progress in US-Iran peace talks.
Supply disruption worries due to the Hormuz standoff further support Crude Oil prices.
Reduced Fed rate cut bets underpin the USD, capping the USD-denominated commodity.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – kicks off the new week on a positive note and reverses a part of Friday's modest decline, though the upside remains capped. The commodity currently trades below mid-$94.00s, up nearly 1.0% for the day, amid global oil supply concerns.
US President Donald Trump has cancelled a planned visit to Islamabad by his envoys Steve Witkoff and Jared Kushner, even as Iran's Foreign Minister Abbas Araqchi arrived in Pakistan. This comes amid a deadlock over issues that include the blockade of the Strait of Hormuz and keep geopolitical risks in play, which continue to act as a tailwind for Crude Oil prices.
Meanwhile, traffic through the strategic waterway remains largely blocked due to Iran's restrictions on movement and the US naval blockade of Iranian ports. This adds to worries about prolonged disruptions and turns out to be another factor offering support to Crude Oil prices. However, a modest US Dollar (USD) uptick caps any further upside for the commodity.
Investors remain worried that the war-driven surge in energy prices will revive inflationary pressures and force major central banks, including the US Federal Reserve (Fed), to adopt a more hawkish stance. In fact, the current market pricing indicates over 80% chance for the Fed rates to remain at the current range in 2026, which continues to underpin the Greenback.
Nevertheless, the aforementioned fundamental backdrop seems tilted in favor of bullish traders and suggests that the path of least resistance for Crude Oil prices is to the upside. Hence, any corrective slide is more likely to get bought into and remain cushioned. However, it will be prudent to wait for a move beyond the $95.00 mark before positioning for further gains.
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