What to Know

  • Brent oil traded near $106.26 a barrel in early Asian trading on Thursday, while WTI oil traded near $94.66.
  • Oil prices softened as the market weighed a US proposal that could lower the cost of shipping crude and fuel.
  • The Trump administration is considering easing sanctions on some shadow fleet vessels so they can carry oil permitted under US rules.
  • The plan remains under discussion, and restrictions from European insurance companies could limit its impact.
  • API data showed US crude stocks dropped by 11.1 million barrels last week, a draw that may curb further oil losses if confirmed by official data.
  • Shipping attacks near the Strait of Hormuz continue to keep supply risk in focus.
  • WTI technical traders are watching $96.50 as a breakout level that could open a move toward $102.50.
  • Brent chart watchers are watching $110 resistance, with a break potentially pointing toward $120 and $125 areas.
  • A move below $90 in WTI or below $98 in Brent would weaken the current recovery structure.

Oil Prices Ease as Shipping Cost Relief Enters Focus

Oil prices moved lower in early Asian trading on Thursday as traders assessed whether a US proposal could reduce the cost of moving crude and fuel through global shipping channels. Brent oil dropped near $106.26 a barrel, while WTI oil traded near $94.66, reflecting a market that is balancing possible logistical relief against persistent supply uncertainty.

The key issue is whether the Trump administration will ease sanctions on some shadow fleet vessels, allowing those ships to carry oil that is permitted under US rules. If adopted, such a step could increase the availability of shipping capacity and help move more crude and fuel from the Gulf. Lower shipping costs would typically reduce pressure on delivered oil prices because transportation bottlenecks can amplify supply tightness even when physical crude remains available.

For now, however, the proposal remains under discussion rather than settled policy. That distinction matters for oil markets, where headline risk can drive fast intraday repricing but lasting trend changes usually require confirmed changes in supply, inventories, or policy implementation. European insurance restrictions could also limit the effect of any US adjustment, because tanker availability depends not only on legal permission to move cargoes but also on the ability to secure coverage, financing, and port access.

Inventory Draws and Hormuz Risks Complicate the Bearish Case

While the tanker sanctions discussion weighed on crude, fresh US inventory signals offered a counterweight. API figures showed crude stocks fell by 11.1 million barrels last week. A draw of that scale, if confirmed by the official US inventory data, would point to a tighter physical market and could make it harder for sellers to extend the decline without a fresh bearish catalyst.

The market is also keeping close watch on shipping attacks near the Strait of Hormuz. The waterway remains a critical point of concern because any disruption near the area can raise fears about delays, risk premiums, and rerouting costs. Even when actual supply is not immediately reduced, the threat of disruption can support oil prices by forcing traders to price in the possibility of sudden logistical stress.

This leaves crude in a sensitive position. Cheaper shipping could weigh on prices if the US proposal becomes effective and cargo movements improve. At the same time, a confirmed inventory draw and further disruption near Hormuz could quickly reverse selling pressure. The result is a market where downside risks and rebound risks are both active, making technical levels especially important for short-term traders.

WTI Forecast: $96.50 Breakout Level Remains Central

WTI’s chart structure remains constructive while prices hold above key medium-term support areas. On the weekly chart, WTI has been trading above the 10-week and 20-week moving averages, a setup that technical traders often view as consistent with positive momentum. The market formed a low last week at $86.86 and then rebounded toward the $96 area, showing that buyers responded after the pullback.

WTI is now correcting after testing the $96 zone, and the next phase depends on whether buyers can reclaim upside momentum. A move above $96.50 would be important because it could trigger a renewed push toward the $102.50 resistance level. If WTI posts a weekly close above $102.50, some chart watchers see scope for a broader rally toward the $120 area.

The RSI on the weekly chart remains above the midline, which supports the view that momentum is still positive rather than decisively bearish. However, the bullish case is not unconditional. As long as WTI holds $80.50 support, the broader trend remains positive from a technical perspective. A failure to hold nearer-term support would make the outlook more vulnerable, particularly if macro headlines shift toward greater supply availability.

WTI Daily Chart: Inverted Head and Shoulders Keeps Buyers Interested

The daily WTI chart also shows constructive price action. Technical traders are monitoring an inverted head and shoulders pattern that formed above the 200-day SMA. This type of formation is often read as a possible recovery structure when it appears after a period of pressure, although confirmation still depends on follow-through and the defense of key support zones.

WTI has been consolidating above the 50-day SMA and appears to be attempting a move toward the $104 area. Immediate support remains at $93 and $90. If WTI breaks below $90, the next downside area to watch is $87. Such a move would weaken the short-term recovery and may reduce confidence in the breakout scenario above $96.50.

The daily RSI also remains above the midline, reinforcing the idea that momentum has not yet shifted decisively in favor of sellers. Still, with oil trading around policy headlines, inventory expectations, and supply risk, technical momentum can shift quickly. Traders are therefore likely to treat $96.50, $102.50, $93, and $90 as important levels for judging whether the WTI recovery has staying power.

Brent Forecast: $110 Resistance Is the Key Hurdle

Brent oil remains technically constructive while it trades above its 50-day and 200-day SMAs. The immediate upside barrier is $110. A break above that level could push Brent toward $120, a level that has become a major focus for traders watching whether the current recovery can develop into a stronger advance.

On the downside, Brent needs to avoid a break below $98. If that level fails, prices could move toward $87, which would represent a much weaker technical backdrop. For now, the RSI remains well above the midline, suggesting that Brent still has positive momentum despite the latest pullback.

The weekly chart strengthens that cautious bullish reading. Brent has formed positive weekly candles during the past two weeks above the $100 level. Shadows on the weekly candles during the past three weeks suggest that buyers have been defending dips and that the market has shown underlying strength. If Brent clears $110, some chart watchers see a move toward the $120 and $125 areas as possible.

Volatility Remains Elevated After the US-Iran War

The oil market remains highly volatile after the US-Iran war, and that backdrop continues to argue for wide trading ranges. In such conditions, crude can react sharply to headlines about sanctions, shipping, inventories, and supply routes. This volatility also means that levels which appear technically strong can be tested quickly if the market receives a surprise policy or geopolitical signal.

For Brent, the broader positive risk remains in place as long as prices stay above $80. That does not mean the market will move in a straight line, especially with immediate resistance at $110 and downside risk below $98. Instead, it suggests that the larger structure has not yet turned decisively negative, even as short-term selling pressure appears when traders price in lower shipping costs.

For WTI, the same tension is visible. Buyers have defended the market after the low at $86.86, but the rally needs confirmation above $96.50 to strengthen the case for $102.50. If the official inventory data confirms the 11.1 million-barrel draw shown in the API figures, it could help support that attempt. If the tanker sanctions plan advances and meaningfully reduces shipping stress, prices may struggle to sustain upside without fresh supply concerns.

What Traders Are Watching Next

The next major catalyst is the official US inventory data. Confirmation of the reported 11.1 million-barrel crude draw would likely keep attention on tight supply conditions and could support a rebound in both WTI and Brent. A smaller draw, or a surprise that weakens the inventory story, could leave oil more exposed to the bearish effect of cheaper shipping expectations.

Traders will also monitor whether the US proposal on tanker sanctions develops into a concrete policy change. The market reaction may depend on how many vessels are affected, whether cargoes can actually move under US rules, and whether European insurance restrictions continue to limit participation. Because the proposal is still under discussion, the market may remain sensitive to updates rather than fully pricing in a lasting drop in shipping costs.

Near the Strait of Hormuz, any new disruption could quickly increase the risk premium in crude. That is why the current decline may remain fragile. Oil sellers have a potential policy catalyst in the form of lower shipping costs, but buyers still have support from inventory draws, technical momentum, and ongoing supply risk.

In the near term, the WTI map is relatively clear. A break above $96.50 keeps $102.50 in view, while a break below $90 would weaken the recovery and point toward $87. For Brent, a move above $110 keeps $120 and $125 areas in focus, while a move below $98 risks a slide toward $87. Until one side secures confirmation, oil may continue to trade in broad ranges driven by headlines and key chart levels.

Frequently Asked Questions (FAQs)

Why did WTI and Brent oil prices ease?

WTI and Brent eased as traders assessed a US proposal that could lower oil shipping costs by easing sanctions on some shadow fleet vessels. Lower shipping costs could help move more crude and fuel from the Gulf, reducing some pressure on prices.

What prices were WTI and Brent trading near?

In early Asian trading on Thursday, Brent oil traded near $106.26 a barrel, while WTI oil traded near $94.66. Those levels came as the market weighed shipping policy headlines against supply and inventory risks.

What is the key WTI breakout level?

The key WTI breakout level is $96.50. If WTI rallies above that level, technical traders see potential for a move toward $102.50, with a weekly close above $102.50 opening the way toward the $120 area.

What support levels matter for WTI?

Immediate WTI support levels are $93 and $90. A break below $90 could push prices toward $87, while the broader positive structure remains supported as long as WTI holds above $80.50.

What is the main Brent resistance level?

The main Brent resistance level is $110. A break above $110 could push prices toward $120, with some chart watchers also monitoring the $125 area if upside momentum strengthens.

What Brent level would weaken the outlook?

A break below $98 would weaken the Brent outlook and could push prices toward $87. Until that happens, Brent remains constructive while trading above its key moving averages and above the $100 area on the weekly chart.

Why does the US crude inventory draw matter?

API data showed US crude stocks dropped by 11.1 million barrels last week. If official data confirms a large draw, it could indicate tighter supply and limit further losses in oil prices.

How does the Strait of Hormuz affect oil prices?

Shipping attacks near the Strait of Hormuz keep supply risk in focus. Any further disruption near the area could raise concerns about delays, shipping costs, and potential supply stress, supporting oil prices.

Is the tanker sanctions plan already confirmed?

No. The plan remains under discussion. Its final impact may also be limited by restrictions from European insurance companies, which can affect whether vessels are able to operate even if some sanctions are eased.