WTI crude rebounds toward $80 as Hormuz supply risks persist

WTI crude climbed to about $78.48 a barrel after holding support near $74.20, while Brent extended its recovery above the 50-period EMA as persistent Strait of Hormuz supply risks kept the physical market off balance.

"The physical market has not yet been balanced, so the market is still volatile to shocks," said Arslan, an analyst at FXEmpire, pointing to the incomplete recovery of Persian Gulf exports after months of disruptions along the Strait of Hormuz.

U.S. crude inventories rose to exceed 407 million barrels in the week to Aug. 1, according to the Energy Information Administration, defying expectations for a decline, while natural gas storage climbed 33 billion cubic feet to 3,117 billion cubic feet. The five-year average surplus expanded by 195 billion cubic feet.

With OPEC+ production targets raised in July but Gulf producers still well short of previous output levels, new supply from the U.S., Brazil and Guyana is helping fill the gap. The International Energy Agency expects global gas demand to decline slightly, with new resources in North America, Africa and Australia offsetting weak Gulf LNG demand.

WTI crude tests descending trendline near $79.50

WTI crude is trading near $78.48 after bouncing from the $74.20 support, with the balance covering the key demand zone near $77.75. Prices remain below the 50 and 100-period EMAs, keeping the trend cautious, though demand has pushed WTI back above its most recent breakout level as it approaches a long-term descending trend line.

Strong resistance sits between $79.50 and $80.00 at the descending trend line. The RSI has crossed the mid level and now sits above 51, supporting further bullish movement. If prices rise above the resistance zone, WTI could reach $81.92 and $86.16. Further support lies near $77.75 and $74.21.

The last time WTI traded above $80 was in the weeks before the Hormuz disruptions took hold, and a sustained break above the descending trendline would mark the first bullish confirmation since that period. A failure at resistance, by contrast, would leave the market range-bound between $74 and $80 as traders weigh the pace of Gulf export recovery against the Iran-Oman talks that could ease transit restrictions.

Brent eyes breakout above $84.60

Brent crude is trading around $83.89 as it continues its recovery after bouncing off the rising trendline at $78.30. Prices have been trading above the 50-period EMA ($83.80) but remain below the 100-period EMA ($84.59). The RSI has moved to 57, showing the push is turning bullish.

A move above $84.60 would continue the push toward resistance at $86.33, $91.13 and $95.23. The first support is at $82.17, followed by the trendline at $78.26. As long as Brent holds above the 50-EMA, the bullish case for an eventual push to the 100-EMA strengthens.

Natural gas stays pressured below key averages

Natural gas is trading around $2.64 as it continues to be rejected by the descending trendline and remains below the 50-period ($2.73) and 100-period ($2.82) EMAs. Prices are trading near weak support at $2.65, where buyers have not generated a meaningful breakout. The RSI remains weak at 34 with a strong bearish push.

A close below $2.60 would push the price to $2.55 and $2.49. If price improves above $2.65, gas would trade at $2.74, though a break above $2.81-$2.82 would be the first indication of a bullish trend. Until then, rising prices will be rejected by the descending trendline.

The supply picture for natural gas is more favorable domestically. Storage builds have been supported by strong production and aggressive LNG feedgas demand despite summer demand from the power sector. Globally, the Middle East conflict has continued to impact loaded LNG supply resources leaving ports worldwide.

For traders, the divergence between crude and natural gas matters for positioning into the U.S. jobs report and the next round of Hormuz diplomacy. A successful Iran-Oman deal would likely cap crude's upside and accelerate the pullback toward $74 support, while a breakdown in talks could push WTI through $80 and Brent toward $86.33. Natural gas, by contrast, faces a more one-sided risk profile, with a close below $2.60 opening the path to $2.49.

This article is for informational purposes only and does not constitute investment advice.