Global benchmark oil prices moved lower, with WTI edging towards the $90/bbl level while Brent slipped towards the mid-$90s after briefly trading above $100/bbl. In broader markets, a risk-on tone took hold as equities advanced and bond yields fell across major markets, with US equity futures reaching fresh highs.
Market chatter around US/Iran negotiations remained limited, with reporting focused on reopening the Strait of Hormuz and offering little detail on longer-term issues such as uranium enrichment. Oil was marked down by about $5/bbl on the day, leaving WTI at risk of breaking below $90/bbl and Brent retreating towards the mid-$90s after its overnight move through $100/bbl. The article was produced using an Artificial Intelligence tool and reviewed by an editor.
Oil Prices Under Pressure Amid Market Optimism
We see oil prices are soft, with WTI threatening to break below the psychologically important $90 per barrel level. This weakness is happening alongside a broader market rally in stocks and a dip in bond yields, suggesting investors are moving away from safe havens. The potential for a U.S.-Iran deal, even a limited one, is easing fears about supply disruptions in the Middle East.
Our view is reinforced by last week’s U.S. Energy Information Administration (EIA) report, which showed a surprise inventory build of 1.8 million barrels when a small draw was expected. This indicates that supply is currently outpacing demand, adding more weight to the bearish sentiment. With inventories rising, the $90 support for WTI becomes even more critical for the market’s direction.
This risk-on mood is supported by the latest inflation data from late April 2026, which showed the Consumer Price Index (CPI) cooled to 2.9%, easing pressure on the Federal Reserve to consider further rate hikes. This economic backdrop encourages investment in equities over commodities like oil. As of this morning, the S&P 500 is trading up near 5,520, a fresh high for the year.
Trading Strategies And Seasonal Considerations
For the coming weeks, we are looking at buying WTI put options with an $88 strike price to capitalize on a potential break below the $90 support level. Implied volatility has been decreasing with the market’s calmer tone, making options relatively inexpensive to purchase right now. Selling covered calls against existing long oil positions could also be a viable strategy to generate income in what we expect to be a capped market.
However, we must remain aware of historical patterns as we approach the summer driving season. Historically, demand for gasoline, and therefore crude oil, increases in June and July, which could provide a floor for prices. If WTI fails to break decisively below $90 in the next couple of weeks, we may see prices stabilize and try to rally on this seasonal demand.
