Oil breaks out as Hormuz risk keeps bulls in play

Oil is starting the week on a firmer footing, with WTI pushing out of a corrective Elliott Wave zig-zag structure as geopolitical risk around the Strait of Hormuz continues to underpin the market.

The technical picture is beginning to improve. After topping near $94 in late July, WTI moved through a classic A-B-C corrective sequence, with the C-wave finding support in the mid-$70s, close to the 78.6% Fibonacci retracement area. Prices have since rebounded toward $79–$80, and the latest move suggests crude is attempting to break free from the descending zig-zag pattern.

A sustained move above the corrective trendline would strengthen the case that the pullback has run its course. $80–$81 is the first area to watch, followed by the 38.2% retracement near $84. On the downside, the mid-$70s remains the key support zone.

Fundamentals are giving buyers reasons to stay engaged.

Uncertainty surrounding the Strait of Hormuz remains the dominant risk premium. US President Donald Trump said Washington is “semi-negotiating” with Iran, pointing toward continued economic pressure rather than an immediate military escalation. Iran and Oman are also reportedly moving closer to an agreement on a shipping route through Hormuz, although a broader reopening of the waterway may still depend on progress in US-Iran negotiations.

That leaves the market caught between the prospect of diplomatic progress and the risk that disruption to one of the world’s most important crude transit routes persists.

Speculators, however, have become more cautious. Money managers cut net-long NYMEX WTI positions by 7,257 lots to 101,050, while ICE Brent net longs fell by 20,361 lots to 164,722, marking a second straight weekly decline. That reduction in bullish positioning could become important if the technical breakout gathers momentum, as sidelined or recently reduced positions may be forced to reassess.

US supply signals are also improving. The oil rig count increased by three to 454, its highest level since May 2025, while crude exports remain elevated as international buyers continue searching for alternative barrels.

Opening bell takeaway: WTI’s Elliott Wave correction appears to be giving way to a breakout attempt. With Hormuz uncertainty still supporting the geopolitical premium, a clean push through $80–$81 could put $84 back into focus.