WTI Oil picks up to $89.00 as US announces a total blockade of Hormuz
- WTI Oil prices bounce up to $89.00 from three-week lows below $85.00.
- The announcement of a total blockade of the Strait of Hormuz has reversed the downtrend.
- Oil prices had lost nearly 8% over the previous two days amid speculation of a new round of US-Iran peace talks.
Oil prices have bounced up during the Asian session, as the US military announced a total blockade of the Strait of Hormuz on Tuesday, increasing the chokehold on supply and putting the new round of talks with Iran into question. The price of the US benchmark West Texas Intermediate (WTI) barrel appreciated about $4 during the Asian session, retracing previous daily losses, and reaching levels near $89.00.
WTI prices had lost nearly 8% over the previous two days, to hit fresh three-week lows at $84.86 earlier on Tuesday amid rumours that the US and Iran maintained contacts to resume peace talks. US President Trump finally confirmed those hopes, affirming that negotiations might restart in the next two days.
Technical Analysis: Support around $84.50 is holding bears
The technical picture shows the WTI US Oil in a bearish bias within a broader horizontal channel, with support in the area of $84.50 holding downside attempts for now.
Indicators in the 4-hour chart remain in bearish territory. The Relative Strength Index (RSI) is recovering from oversold territory but is still below 50, and the Moving Average Convergence Divergence (MACD) shows an expanding negative histogram highlighting the weak momentum.
A clear break below $84.46 would confirm a deeper correction from the early March highs, aiming for the $80.00 psychological level and the March 10 low, near $76.00. On the topside, bulls face the next significant barrier at the weekly high of $98.10, followed by the April 5 and 7 highs, around $106.50, and the mentioned March 9 high, at $113.28.
(The technical analysis of this story was written with the help of an AI tool.)
(The last paragraph of this story was corrected on April 15 at 08:30 GMT to say that the April 5 and 7 highs are around 106.50 and that the March 9 high is 113.28)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
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