June WTI Holds Above $100 as the Strait Stays Frozen and Trump Raises the Stakes
June WTI crude oil is trading at $103.29 Monday morning, up $1.35 or +1.32%. Spot Brent crude oil is at $115.64, up $3.50 or +3.12%. The Strait of Hormuz is still effectively closed, a tanker was struck near Fujairah overnight, and President Trump just announced a military escort operation called Project Freedom that could either reopen shipping lanes or trigger a direct confrontation with Iran. The physical market is tightening with every session and traders are pricing each development as it hits. Keep reading for what the charts are saying and what is actually driving this market.
WTI Crude Oil Technical Analysis
June WTI crude oil futures are higher on Monday after reversing earlier weakness. After posting a second straight lower-low on Sunday, buyers stepped in to essentially defend the psychological $100.00 level when prices dipped to $99.11. The fresh buying drove the market to a $107.46 intraday high.
The recent two-day setback did not have much of an impact on the trend. Other than producing a new main top at $110.93, no main bottoms were threatened. A trade through this top will signal a resumption of the uptrend.
The new main range is $78.97 to $110.93 with its retracement zone at $94.95 to $91.18 its nearest support zone. The new minor range is $110.93 to $99.11. Its minor pivot is $105.02. The market is currently trading on the weak side of this pivot, putting it in a position to possibly retest $100 or lower.
The longer-term range is $63.47 to $110.93. Its retracement zone support is $87.20 to $81.60.
The 50-day moving average at $88.03 and the 200-day moving average at $67.41 are both support and trend indicators. The 50-day is most important since it falls in between the retracement levels at $91.18 to $87.20. This is our value zone.
On the upside, over last week’s high at $110.93, resistance lines up at $117.63 and $119.48. Another pair of resistance levels comes in at $123.00 to $130.50. Above this is my measured target at $135.12. The first set of resistance levels is related to the U.S.-Iran War. The second set is linked to the Russia-Ukraine War.
As long as the main trend is up, I expect to see buyers come in on the breaks into the projected support levels like we saw earlier on the test of the psychological $100 level.
The key level to watch today is the pivot at $105.02. Earlier today, buyers crossed to the bullish side of this pivot but were unable to hold on to the gains. Trader reaction to this price will tell us if we have aggressive traders willing to take out offers to extend the rally, or passive traders, hoping for a pullback into support.
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Spot Brent crude oil is setting up similarly. The short-term range is $120.54 to $110.28. Its pivot at $115.41 is the key level to watch. Overcoming it will indicate the presence of aggressive buyers willing to take out offers. This would put it in a position to challenge last week’s high at $120.00 and possibly fuel a breakout into the 2022 top at $126.63.
On the flipside, a failure to hold $115.41 and a sustained move under it would be an early sign of weakness. This could lead to a retest of the minor bottom at $110.28. If this fails, prices could collapse into the retracement zone at $103.93 to $100.01 and the 50-day moving average at $104.39. This is the major value area for new buyers.
The Strait Is Still the Story
The Strait of Hormuz is not open. Traffic through the waterway is nearly frozen and roughly one-fifth of the world’s energy shipments are effectively sidelined. A tanker was struck by projectiles near Fujairah in the United Arab Emirates Monday morning. That single incident tells you everything you need to know about whether conditions are improving. Any vessel attempting to move through the region is carrying real physical risk and the market is pricing that in with every session.
This supply shock is the backbone of the current rally. As long as shipments remain restricted the market has a fundamental reason to stay bid and nothing that happened over the weekend changed that picture.
Project Freedom Changes the Risk Calculus
Trump’s announcement of Project Freedom introduced a new layer to this trade. The plan uses guided-missile destroyers, aircraft and thousands of service members to escort stranded commercial ships out of the Strait. The goal is to restore shipping flow. The risk is direct confrontation with Iran.
I’ve been watching geopolitical risk premiums build and unwind in oil for a long time. This one is different because the military commitment is explicit and the other side has already warned U.S. forces against entering the Strait. If Project Freedom succeeds, supply concerns ease and prices come off. If it triggers an escalation, the risk premium that is already in this market gets a second leg. Either way, volatility stays elevated and traders need to be positioned for sharp intraday moves.
Iran’s Claim and the Headline Risk Problem
Iran claimed it attacked a U.S. warship and forced it to retreat from the Strait. The U.S. denied it immediately. The damage to sentiment was already done by the time the denial hit. That is the environment traders are operating in right now. Unverified claims move markets in real time and the corrections come after the positions are already on. I’ve seen this pattern before. It does not end quickly and it does not end cleanly.
OPEC+ Is Still a Sideshow
OPEC+ agreed to raise output by 188,000 barrels per day. Under normal conditions that number matters. Right now it does not. Those additional barrels cannot reach the market if the Strait stays blocked. Traders are treating the increase as symbolic and they are right to. Production policy is not the driver here. The Strait is the driver and OPEC+ cannot fix the Strait.
What I’m Watching
The key level today is the pivot at $105.02 on June WTI. Hold above it and aggressive buyers are in control. Fail to hold it and the market tests $100 again. For Spot Brent the number is $115.41. Same setup, same logic.
The bigger picture has not changed. Sustained prices near $125 per barrel raise recession risk and that creates a longer-term ceiling. Right now the immediate supply shock is running this market and recession risk is a background concern. The path of least resistance stays higher until the Strait shows clear signs of reopening or Project Freedom changes the physical supply picture in a meaningful way. Neither has happened yet.
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