WTI Crude Near $70 as Peace Dividend Fades, Traders Eye Bounce

WTI crude oil traded quietly on Thursday, the front-month contract holding near $70 as U.S. markets observed the Juneteenth holiday. Trading volumes were thin.

The market has fallen sharply over the past two weeks. Chris, a proprietary trader and senior analyst at FXEmpire, said the selloff removed a "peace dividend" that had been priced in after ceasefire talks between Israel and Hezbollah and discussions about reopening the Strait of Hormuz.

Chris said $70 continues to act as a floor. He expects short-term buyers to step in on dips. A short-term bounce is likely, he said. The market is not a buy-and-hold situation, he added. He said he would sell on the first signs of exhaustion after any rally.

For WTI, the 200-day moving average sits above the current price and is likely to cap any bounce, Chris said. Brent crude faces resistance near its 200-day moving average at $85, he said. A gap below the current level could offer support at $72.

The selloff coincided with a stronger dollar and higher Treasury yields. Those macro forces added pressure on commodities. For more on the factors behind the recent crude selloff, see Hormuz Reopening Meets Hawkish Fed: Macro Crosscurrents.

Traders now turn to weekly U.S. crude inventory data as the next scheduled catalyst.