WTI crude is breaking out of a multi-week pullback, rebounding to $79-$80 a barrel after finding support in the mid-$70s below a late-July high near $94. Risk around the Strait of Hormuz continues to underpin prices even as speculators trim bullish NYMEX and ICE positions and the US oil rig count climbs to its highest level since May 2025.
Crude oil is attempting to break out of a multi-week pullback, with WTI rebounding to $79-$80 a barrel after bottoming in the mid-$70s near the 78.6% Fibonacci retracement level. That marks a shift from the corrective A-B-C wave pattern that pulled prices down from a late-July high near $94.
Key levels to watch
A sustained break above the corrective trendline would strengthen the case that the pullback has run its course. $80-$81 is the first resistance area to watch. Beyond that, the 38.2% retracement near $84 comes into view. On the downside, the mid-$70s remains the key support zone.
Hormuz risk still the dominant premium
Uncertainty around the Strait of Hormuz remains the dominant risk premium underpinning the market. President Donald Trump said Washington is "semi-negotiating" with Iran, pointing to 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 the strait, though a broader reopening 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 trim bullish bets
Money managers, however, have grown more cautious. Net-long NYMEX WTI positions fell by 7,257 lots to 101,050. ICE Brent net longs dropped 20,361 lots to 164,722, a second straight weekly decline. That pullback in bullish positioning could matter if the breakout gathers momentum, since sidelined or recently reduced positions may be forced to reassess.
US supply signals firm up
US supply signals are also improving. The US oil rig count rose by three to 454, its highest level since May 2025, while crude exports remain elevated as international buyers search for alternative barrels.
Source: Commodities Analysis & Opinion
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