WTI Holds Above $81 as Geopolitics Offset Demand Concerns

Key Moments

Geopolitical Risks Support WTI Above $81

West Texas Intermediate (WTI), the U.S. crude oil benchmark, was trading near $81.60 during Asian hours on Monday, posting modest gains as market participants weighed a mix of geopolitical tensions and a stalled diplomatic backdrop.

Price action remained choppy as efforts to reopen the Strait of Hormuz were described as completely deadlocked. Market focus stayed centered on the mounting risks around the waterway and the broader regional backdrop.

According to Bloomberg, Lebanon experienced its deadliest day of clashes in months on Sunday after Israeli strikes on Tehran-backed Hezbollah. The geopolitical tone hardened further after Iran’s Deputy Foreign Minister Kazem Gharibabadi over the weekend told U.S. President Donald Trump to “accept the reality of defeat and stop indulging in delusions” following remarks from Trump that he would soon declare the Strait of Hormuz a “territory of the United States.”

Diplomatic channels between Tehran and Washington also appeared firmly shut. Iran’s Foreign Minister Abbas Araghchi said there were “no negotiations currently taking place between Tehran and Washington” and added that the U.S. would have to accept Iran’s conditions before shipping could resume through the Strait.

Beyond the Middle East, the supply backdrop was influenced by disruptions elsewhere. Russia was reported to be grappling with fuel shortages as Ukraine resumed near-daily attacks on oil refineries.

Inventory Data in Focus

On the data front, traders were awaiting the latest weekly crude stock figures from the American Petroleum Institute (API), scheduled for release later on Tuesday.

Market participants were poised to interpret the report through the usual demand-supply lens. A larger-than-anticipated drawdown in crude inventories would signal stronger consumption and potentially support WTI prices. Conversely, a bigger-than-forecast build would point to softer demand or oversupply, which could pressure prices to the downside.

IEA and OPEC Cut Demand Projections

Commerzbank observed that the two main forecasting agencies had adopted a more cautious stance on near-term oil demand. The bank noted that “the IEA and OPEC have each revised their forecasts for oil demand this year downwards by 200,000 barrels per day.”

This left a notable gap between their overall views. Commerzbank highlighted that “the IEA now expects demand to fall by 1.6 million barrels per day, whilst OPEC still anticipates an increase of 580,000 barrels per day,” underscoring the sizable divergence in their assessments of underlying consumption trends.

On the supply side, Commerzbank pointed out that “according to the IEA, oil supply from outside OPEC+ is set to rise by 690,000 barrels per day,” suggesting an additional source of potential looseness in the global balance.

Technical Picture: Neutral Bias With Slight Upside Tilt

From a technical standpoint, the daily chart for WTI U.S. Oil showed a neutral to mildly constructive short-term tone. Prices were holding marginally above the middle line of the Bollinger Bands, while upside attempts were restrained below the 100-day simple moving average (SMA) around $86.38.

This pattern was consistent with a consolidation phase within a broader corrective setup. The Relative Strength Index (RSI) hovered near 53, indicating balanced momentum and the absence of a decisive directional bias.

On the resistance side, initial hurdles were seen at the 100-day SMA at approximately $86.40. A sustained break higher could bring the upper Bollinger Band near $90.10 into view as a more bullish trigger level if buyers regain control.

On the downside, immediate support was identified around the 20-day SMA and Bollinger midline near $81.60. A clear move below that area would expose the lower Bollinger Band region around $73.10, where stronger dip-buying interest might develop.