Crude oil prices hovered near one-week lows Tuesday after a pause in U.S. attacks on Iran reduced fears of an immediate supply shock. Brent crude slipped to $87.86 per barrel, while West Texas Intermediate fell to $82.24 as of 6:10 a.m. GMT on July 28. Both benchmarks lost about 8% Monday after Washington suspended its air campaign and reported progress in talks with Tehran. The market remains vulnerable because oil shipments through the Strait of Hormuz and Red Sea have not returned to normal.
Diplomatic Progress Removes Part of Geopolitical Premium
Diplomatic progress has removed part of the geopolitical premium that pushed crude prices sharply higher earlier in July. The United States has warned that attacks could resume if negotiations fail.
Oil and refined-product exports through the Strait of Hormuz averaged 2.9 million barrels per day in the week ended July 24, down from 5.9 million barrels per day a week earlier. Saudi Arabia also reported threats against petroleum infrastructure, while traffic through the Red Sea remained disrupted. The Caspian Pipeline Consortium resumed loadings from its Russian Black Sea terminal after a one-week shutdown.
WTI Tests Support Near $81.92 After Rally Rejection
The daily chart shows WTI near $81.92 after a sharp rejection from the $90 area. Price has returned to its 50-day moving average, while the relative strength index has pulled back from overbought territory.
The $81 to $82 region now forms the first support zone. A close below it could expose the Fibonacci support near $77.93, followed by the moving-average area around $74.50. WTI must recover $84.65 before challenging stronger resistance between $87.90 and $90.10.
ArcisFX said the analyst closed short positions at the 50-day average and would consider selling another rebound depending on developments around Hormuz and the Federal Reserve.
Brent Chart Shows Steep Reversal After Resistance Failure
Brent's daily chart shows a steep reversal after price failed near the $97 to $106 resistance region. Analyst Sahil Pahwa presents a bearish wave scenario that could eventually extend toward $58.72.
That remains a conditional projection rather than a confirmed target. Brent would first need to break the mid-$80 area and then lose support near $80 and $70. A recovery above $90 would weaken the immediate bearish case.
U.S. Inventories Rise While Futures Curve Shows Backwardation
U.S. commercial crude inventories rose by 2 million barrels to 411.7 million in the week ended July 17. Despite the increase, stocks remained 6% below their five-year seasonal average. The Energy Information Administration will publish its next report Wednesday, July 29.
The downward-sloping futures curve shows backwardation, meaning near-term oil commands a premium over later deliveries. That structure suggests traders still see immediate supply risks even as longer-dated prices reflect expectations for eventual normalization.
OPEC+ will add 188,000 barrels per day in August and meet again Aug. 2 to review market conditions. The International Energy Agency expects global oil demand to fall by 1 million barrels per day in 2026, although June supply remained 9.4 million barrels per day below prewar levels.
For now, easing geopolitical tension favors lower crude oil prices. However, restricted shipping, below-average U.S. inventories and a backwardated futures curve could limit the decline.
FAQ
What caused crude oil prices to fall on July 28?
Crude oil prices fell after the U.S. paused its air campaign against Iran and reported progress in diplomatic talks with Tehran. Brent crude slipped to $87.86 per barrel, while WTI fell to $82.24 as of 6:10 a.m. GMT on July 28. Both benchmarks lost about 8% Monday following the suspension announcement.
How have oil shipments through the Strait of Hormuz changed recently?
Oil and refined-product exports through the Strait of Hormuz averaged 2.9 million barrels per day in the week ended July 24, down from 5.9 million barrels per day a week earlier. Saudi Arabia also reported threats against petroleum infrastructure, while Red Sea traffic remained disrupted.
What do U.S. crude oil inventories show about current market conditions?
U.S. commercial crude inventories rose by 2 million barrels to 411.7 million in the week ended July 17, yet remained 6% below their five-year seasonal average. The downward-sloping futures curve shows backwardation, indicating traders still see immediate supply risks despite the inventory increase.
