WTI declines as US-Iran deal hopes and Hormuz outlook weigh on Oil

• WTI drops over 2% as US-Iran deal speculation builds.
• Traders focus on Hormuz headlines and Tehran’s pending response.
• Strong US jobs data fails to offset weak fuel sentiment.

West Texas Intermediate (WTI), the US crude Oil benchmark, falls some 2.49% on Friday, poised to end the week with losses of over 7.39%, amid growing speculation that the US and Iran will reach an agreement to end the conflict.

Oil heads for weekly loss as Hormuz reopening hopes grow

Market mood remains positive, even as tensions rise after the US and Iran exchanged fire overnight. In the meantime, Washington waits for Tehran’s response to the 14-point memorandum, which, according to US Secretary of State Marco Rubio, would be ready later in the day.

Analysts cited by Reuters reported that the Oil trade is mostly focused on Iran’s war headlines and a possible reopening of the Strait of Hormuz.

In the meantime, Baker Hughes reported that drillers added Oil and natural gas rigs for the third consecutive week. The rig count, an indicator of future output, increased by one to 548 in the week to Friday, yet, according to Baker Hughes, it remains down 30 rigs, or 5%, compared to this period a year ago.

This, along with a possible reopening of the Strait of Hormuz, should push WTI prices lower. In that outcome, inflationary pressures would ease, opening the door to further easing, particularly by the Federal Reserve.

Otherwise, an escalation of the conflict would open the door to further upside and push WTI prices back above $100.

Data from the US showed a strong jobs report, with Nonfarm Payrolls in April crushing estimates, rising to 115K, well above the expected 62K. At the same time, US Consumer Sentiment, as measured by the University of Michigan, deteriorated to its all-time low in May, as households feel the pain from high gasoline prices.

WTI Price Forecast: Technical outlook

In the daily chart, WTI US Oil trades at $92.47. The contract holds a constructive near-term bias as price remains above the latest triple simple moving average cluster around $91.98 and comfortably above both active rising trend-line supports, suggesting the broader uptrend is intact despite the recent pullback from this month’s highs. Momentum is more neutral, with the 14-day Relative Strength Index easing to about 48, hinting at consolidation rather than outright exhaustion on either side.

On the downside, initial support is seen near the $92.00–$92.50 area, where spot trades just over the clustered simple moving averages at $91.98; a sustained break below here would expose the higher rising trend-line region around $89.00, ahead of the deeper structural uptrend support tied to the earlier line near $80.82. With no clear overhead reference levels in the dataset, any recovery above the current area would effectively extend the existing uptrend, leaving the focus on whether buyers can continue to defend the nearby moving average and trend-line floors as volatility rebuilds.

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