Market Analysis Summary: WTI Oil and the Strait of Hormuz

Date: May 25, 2026

Author: Elior Manier

Overview

WTI Crude Oil prices have experienced a significant decline of 7%, returning to levels seen in early May. This drop is primarily attributed to President Trump's announcement regarding the anticipated reopening of the Strait of Hormuz within the next 30 days, which is expected to alleviate geopolitical tensions in the region.

Market Reaction

The announcement has led to a sharp decrease in oil prices during a low-volume trading session, indicating a potential shift in market sentiment. Despite the downturn, the overall narrative remains positive for broader financial markets as they begin the trading week.

Technical Analysis

WTI Crude has broken out of a large triangle formation that had been in place since early April, suggesting further downside potential. Key technical levels have been identified:

• Resistance Levels:
  • $98 to $100 (short-term bearish below)
  • $103.03 (4H 50-period MA)
  • $106 to $108 (June 2022 Resistance)
  • $109 (Triangle resistance)
  • $117 to $120 (larger channel top)
• Support Levels:
  • $93 - $95 (testing, fully bearish below)
  • $90 (psychological level)
  • $87 to $90 (mini-support)
  • $85 (micro support)
  • $82 (Friday 17 lows)
  • $78 to $80 (2025 highs key support)

Market Sentiment

Despite oversold conditions, there has been a notable absence of buying activity from bulls, indicating a potential change in momentum. The crossing of the 50-Hour MA below the 200-MA suggests that traders may favor selling on price rebounds rather than buying on dips. A breach below $90 could open the path towards $80 and lower.

Conclusion

The reopening of the Strait of Hormuz represents a significant diplomatic breakthrough, which could reshape the dynamics of the oil market. Traders are advised to remain vigilant and monitor news developments closely as the situation evolves.

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