WTI crude holds near $84 as only 4 ships pass the Strait of Hormuz on Sunday, down from 17. OPEC+ flags a possible output pause while cutting its 2026 demand forecast.
Alpha Score of 68 reflects moderate overall profile with strong momentum, strong value, weak quality, moderate sentiment.
WTI crude oil futures held near $83.91 in Asian trading Tuesday, supported by a partial blockade in the Strait of Hormuz that has cut shipping traffic to a trickle. Only 4 vessels passed through the chokepoint on Sunday, down from a typical daily flow of 17-20 ships, after renewed US-Iran tensions disrupted Gulf production and transit operations.
The Strait handles roughly a fifth of the world's oil trade. The squeeze comes as OPEC+ signalled it could pause or reverse a planned 188,000 barrel-per-day production increase from August if market conditions deteriorate. The group has already trimmed its 2026 global demand growth forecast to 780,000 bpd, a sign it expects consumption to soften.
WTI broke above its 50-day and 100-day moving averages in late July, clearing resistance at $80.97. The next upside target sits at $87.57, with a second at $93.52. Support levels are $80.97 and $75.21. The relative strength index sits just under 60, pointing to bullish momentum that is not yet overextended.
Brent crude was trading at $90.75, testing resistance at $91.82. A clean break above that level would challenge the long-term descending trendline that has capped rallies since mid-2024, with the next target at $98.03. Support is at $87.34 and $84.12. Brent's RSI is at 65, approaching overbought territory but not yet flashing a reversal signal.
Natural gas, meanwhile, remains stuck in a bearish pattern. The front-month contract was at $2.88, below both the 50-day EMA at $2.97 and the 100-day EMA at $3.04. Resistance sits at $2.94, $3.00 and $3.05. Support is at $2.85 and $2.76. The RSI at 44 confirms bearish momentum.
Liquefied natural gas demand is providing some backstop. The US Energy Information Administration expects LNG exports to hit 17 Bcf per day by 2026. US natural gas inventories are projected at 3,966 Bcf by the end of October 2026, roughly 5% above the five-year average, with record production keeping storage well supplied.
The OPEC+ demand downgrade and the Hormuz disruption create opposing forces for crude. The supply shock from the Strait is immediate and visible; the demand revision is a forward-looking headwind. For now, traders are pricing the blockade risk first.
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