Snapshot: WTI crude has plunged over 4% to $77.60 per barrel, compounding Monday’s 4.9% rout to trade at its lowest level since early March. This unrelenting selloff is driven by supply-side optimism surrounding an expected US-Iran interim agreement to reopen the Strait of Hormuz, set to be signed in Switzerland this Friday. This looming return of regional exports has completely overshadowed tight global inventories.
- WTI is testing critical horizontal support near the $77.50 March lows, with speculative length already washed out by 25,573 contracts last week to a neutral 52nd percentile.
- The primary risk for the NY session is headline volatility around the implementation details of the Hormuz deal, particularly as the US Strategic Petroleum Reserve sits at its lowest level since 1983, limiting Washington’s policy flexibility.
Bias into NY: Bearish below $78.50, targeting a run toward $76.80 as physical supply concerns dominate, though a softer US Dollar Index at 119.51 may provide a minor intraday cushion.