WTI crude rose more than 3% on Wednesday and traded back above $92 after testing $93. The move extended a two-day rebound from about $85 on Monday, with prices last at $92.10–$92.14.
The rise followed the extension of a US-Iran ceasefire that was due to expire on Wednesday night. The two-week truce was extended, after planned talks in Pakistan broke down and a trip by Vice President JD Vance to Islamabad was delayed.
Supply conditions supported prices as Persian Gulf producers reportedly cut output by about 6%. Demand destruction estimates were put at 4 million to 5 million barrels per day.
Upcoming scheduled data includes Thursday’s US flash PMI and the weekly EIA inventory report. Spot WTI traded near $92 while May futures settled near $90 on Tuesday, pointing to deeper backwardation.
On a 15-minute chart, price held above the session open and made higher intraday highs. Stochastic RSI was overbought, with $90.00 cited as a level that could weaken the current structure if broken.
On the daily chart, WTI stayed above the 50-day EMA at $84.97 and the 200-day EMA at $71.42. Daily Stochastic RSI was near 13, with support noted around $92.14.
The current market on April 23, 2026, feels very similar to what we saw last year when WTI crude oil shot up past $92. Geopolitical tensions are once again the main driver, with renewed conflict in the Middle East pushing WTI back towards $88 a barrel. This situation mirrors the uncertainty we navigated during the US-Iran conflict of 2025, suggesting a war premium is being priced back into the market.
Supply fundamentals remain tight, much like they were when Persian Gulf producers cut output last year. OPEC+ has recently confirmed it will extend its voluntary production cuts of 2.2 million barrels per day through the next quarter, squeezing an already constrained global supply. This commitment to lower output provides a strong floor for prices, preventing the kind of deep pullbacks we saw before the 2025 rally.
Unlike last year when demand destruction was a major concern, global demand projections for this year remain robust, led by strong consumption in China and India. The latest Energy Information Administration (EIA) report showed a surprise crude inventory draw of 2.7 million barrels, signaling that physical demand is outstripping supply. This contrasts with the more balanced inventory levels we were seeing just before last year’s price spike.
Given the potential for sharp, headline-driven moves, we believe buying call options is a prudent strategy to capture upside while limiting risk. Implied volatility has climbed over 15% in the past two weeks, reflecting market nervousness, so these positions allow for exposure to a rally without risking significant capital on a sudden de-escalation. This approach is better than being caught off guard, as many were during the rapid recovery from $85 in 2025.
The market structure is also showing signs of tightening, with backwardation deepening as the front-month contract trades at a growing premium to later-dated futures. This indicates a strong immediate demand for physical barrels, similar to the divergence we observed in 2025. Traders should consider calendar spread options to capitalize on this structure, which is likely to persist as long as geopolitical risks are elevated.
While the bias is bullish, we must watch for any signs of a diplomatic breakthrough that could rapidly unwind the war premium. A sustained break below the $85 support level, which aligns with the 50-day moving average, would signal that the upward momentum is fading. We recommend using put options with a strike price below this area to hedge long positions against a sudden reversal.
