WTI closed yesterday’s trading session with its first rebound after four consecutive losing sessions, recovering to around USD 71.3 per barrel. This move suggests that short-term selling pressure has temporarily eased after a sharp correction in crude oil, as the market reduced concerns over the risk of supply disruption through the Strait of Hormuz.
Previously, oil prices had come under significant pressure as oil flows through Hormuz gradually recovered, weakening the upward momentum that had been driven by supply-related tensions.
As the risk of shipping disruptions was no longer priced in as aggressively as before, defensive buying faded, and oil prices quickly returned to reflecting more fundamental factors such as demand, inventories, and the global economic outlook.
In yesterday’s session, WTI’s decline was partly interrupted by a temporary pullback in the U.S. dollar after U.S. Core PCE rose 0.3%, in line with market expectations. The absence of a new inflation surprise helped ease pressure from the dollar and monetary policy expectations in the short term. As a result, oil prices had more room for a technical rebound after the previous sharp decline, although this momentum remains insufficient to confirm a sustainable reversal.
On the one hand, the oil market is showing signs of tightness as U.S. commercial crude inventories fell sharply. According to the EIA, crude inventories declined by 6.1 million barrels and remained about 7% below the five-year average. On the other hand, signals from end-user fuel demand remain unconvincing. A decline in crude inventories may reflect some tightness on the supply side, but it is not enough to confirm a sustainable bullish cycle if demand for gasoline, diesel, and refined products does not improve more clearly. This is also why the market remains cautious despite the relatively positive inventory data.
The divergence in demand forecasts among major institutions further adds uncertainty to the market outlook. OPEC continues to maintain the view that oil demand will keep rising, while the IEA forecasts that oil demand could decline in 2026. This divergence suggests that the market has yet to reach a strong consensus on the outlook for global energy consumption, especially as economic growth continues to be affected by high interest rates, the U.S. dollar, and weak demand in several major economies.
Therefore, from my personal perspective, crude oil still leans toward a corrective or consolidation phase at lower levels. WTI’s recent rebound may help prices regain short-term balance, but for a more sustainable uptrend to develop, the market will need further confirmation from actual consumption demand, particularly fuel demand in the U.S. and China.
In the short term, the area around USD 70 per barrel remains an important zone for WTI. If prices manage to hold above this level, crude oil may continue its technical recovery toward higher levels. However, if buying momentum weakens and WTI loses the psychological support around USD 70 per barrel, corrective pressure could return, with prices potentially moving toward lower levels before finding a new consolidation zone.
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