WTI crude fell on Friday after reports of a new Iranian proposal to the US raised expectations of renewed talks. WTI traded near $99, down over 3% on the day, after reaching a seven-week high of about $107.35 on Thursday.
Reports say Iran submitted the proposal via Pakistani mediators after the US rejected an earlier offer that would have delayed nuclear issues. No details of the new proposal were published.
Iran Proposal Lifts Talk Hopes
The US has said any agreement must address nuclear matters and it will keep a naval blockade of Iranian ports. CNN cited an Iranian source saying talks could restart if the blockade ends and the Strait of Hormuz is fully reopened.
Supply disruption around the Strait of Hormuz remains a key price support. Markets are watching for any move towards restoring normal shipping through the area.
On the daily chart, WTI stayed above the 21-day, 50-day, and 100-day simple moving averages, keeping an upward trend in place. The RSI was near 56 after easing from overbought levels.
Support levels were cited near $94 (21-day SMA), $88 (50-day SMA), and about $74 (100-day SMA). The 14-day Average True Range was about $6.57, pointing to elevated but contained volatility.
Technical Levels And Volatility
Looking back to when this analysis was written in 2025, we saw WTI crude prices pulling back from over $107 to $99 on hopes of a US-Iran deal. Today, with WTI trading around $85 a barrel, it’s clear some of that geopolitical risk premium has faded following the fragile truce. However, that period serves as a reminder of how quickly sentiment can shift and embed a $10-$15 premium into the market.
Current supply-side factors are now providing a firm floor under prices. We see OPEC+ holding firm on its decision to extend voluntary production cuts of 2.2 million barrels per day through the end of the third quarter. This resolve is amplified by the most recent Energy Information Administration (EIA) report, which showed a surprise crude inventory draw of 3.2 million barrels against expectations of a small build.
On the demand side, the picture is less clear, which may be capping any significant rally back towards the 2025 highs. We are seeing some signs of slowing global growth, particularly with recent Chinese manufacturing PMI figures coming in just below expectations at 49.8. This uncertainty is tempering the bullish supply narrative and suggests a more balanced, range-bound market for now.
Given this backdrop, outright directional bets appear risky in the coming weeks. While volatility has eased since the peak of the Hormuz crisis, the CBOE Crude Oil Volatility Index (OVX) remains elevated near 35, keeping options premiums attractive. This environment favors strategies like selling strangles or iron condors to capitalize on time decay, while defining risk against a sudden geopolitical flare-up.
The primary catalyst to watch remains any renewed disruption in the Strait of Hormuz, as the agreement that eased the 2025 tensions is not guaranteed. Technically, we see immediate support around the 50-day moving average near $80, with significant resistance building towards the psychological $90 level. A decisive break of this range will likely require a major shift in either supply data or geopolitical stability.
