WTI crude rose about 3.3% on Tuesday, extending a multi-day rise and nearing $100 in spot trading. It closed near $99.40 and then traded around $98.70, with pricing later noted at $98.30 and $98.66.
The move followed President Trump rejecting Iran’s latest peace proposal and describing the ceasefire as “unbelievably weak”. Reports said he planned talks with his national security team on possible renewed military action and escorting commercial ships through the Strait of Hormuz.
Saudi Aramco CEO Amin Nasser said the market is losing roughly 100 million barrels of supply each week. He also said a return to normal conditions could slip into 2027 if disruption continues.
Wednesday’s EIA inventory report is expected to offer an update on US supply conditions during the Hormuz closure. Last week’s EIA draw was 2.3 million barrels versus forecasts of 3.3 million.
On the 15-minute chart, the day’s open was $95.14 and the Stochastic RSI was near 42. On the daily chart, WTI traded above the 50-day EMA near $90.30 and the 200-day EMA around $74.81, after a pullback from the $105 area.
We remember well the volatility from last year when WTI crude nearly hit $100 a barrel after the Iran peace proposal was rejected. That price spike in 2025 serves as a critical reminder of how quickly geopolitical tensions in the Strait of Hormuz can impact the market. Today, with WTI trading around $88, the market remains on edge, reacting sharply to any supply-side news.
The supply situation is still tight as we head into the peak summer driving season. Last week’s EIA report, released May 6, 2026, showed a crude inventory draw of 2.1 million barrels, signaling that demand is starting to outpace supply again. This trend is something we must watch closely, as any further disruptions could rapidly push prices back toward the highs we saw in 2025.
OPEC+ continues to maintain its production cuts, providing a floor for prices and adding to the supply concerns. We also see that recent US inflation data shows core CPI remaining stubbornly above 3%, meaning central banks are still sensitive to another energy-driven price shock. This macro environment suggests that any significant rally in oil could be met with a more aggressive monetary policy response.
For traders, this points toward elevated volatility, making options strategies particularly attractive. Buying long-dated call options or bull call spreads could be a way to position for a potential supply shock with defined risk. Conversely, given the still-high implied volatility, selling cash-secured puts on any significant dip toward the low-$80s might offer a way to collect premium while setting a favorable entry point.
Key technical levels from last year’s turmoil are now major psychological barriers, with the $90 mark representing the first significant resistance area. The real test will be if prices can challenge the $95-$100 zone again, a level that proved to be a ceiling in 2025. We will be watching the upcoming EIA data and any news out of the Middle East for the next catalyst.
