WTI languishes near March lows, holds above mid-$72.00s amid easing supply concerns
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WTI enters a bearish consolidation phase following the recent decline to March lows.
The resumption of traffic through the Strait of Hormuz undermines the black liquid.
Mixed US-Iran messages over nuclear issues hold back bears from placing fresh bets.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – consolidates during the Asian session on Wednesday and currently trades just above mid-$72.00s, near its lowest level since early March, touched the previous day.
Signs of an uptick in shipping activity through the Strait of Hormuz and a temporary easing of sanctions in Iranian crude exports ease global supply concerns, which, in turn, is seen weighing on the black liquid. In fact, an Iranian military source told Fars news agency that a limited number of vessels are being allowed to pass through the strait each day under coordination with Iran’s Revolutionary Guards Navy.
Moreover, the US Treasury Department issued a temporary 60-day sanctions waiver that authorizes the production, delivery, and sale of Iranian crude oil, petroleum, and petrochemical products. The temporary relief—valid until August 21—under a broader agreement comes on top of progress in US-Iran peace talks and a lull in hostilities in Lebanon, backing the case for further depreciation of Crude Oil prices.
Despite the optimism, bearish traders seem hesitant to place aggressive bets on the black liquid amid mixed messages on Iran’s nuclear issues. According to US President Donald Trump, Iran had fully and completely agreed to the highest level of nuclear inspections long into the future. However, Iran's state media, citing the foreign ministry, reported that Tehran had made no new commitments on nuclear inspections.
This keeps geopolitical risk premiums in play and acts as a tailwind for Crude Oil prices. Furthermore, the lack of strong follow-through selling below a technically significant 200-day Simple Moving Average (SMA) warrants caution before positioning for deeper losses. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for Crude Oil prices remains to the downside.
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