Last Updated on 17/08/2026
WTI edges higher above $81.50 as markets assess the US-Iran impasse
- WTI edges higher to around $81.60 during Monday’s Asian trading session.
- Iranian officials urged the US to “accept the reality of defeat.”
- Market participants remain focused on escalating tensions in Lebanon and potential risks to the Strait of Hormuz.
WTI crude oil trades near $81.60 during Monday’s Asian session, with prices remaining volatile as efforts to reopen the Strait of Hormuz remain at an impasse.
Geopolitical tensions continue to support oil prices. According to Bloomberg, Lebanon experienced its deadliest day of fighting in months on Sunday after Israeli strikes targeted Iran-backed Hezbollah positions. Meanwhile, Iranian Deputy Foreign Minister Kazem Gharibabadi urged US President Donald Trump to “accept the reality of defeat” after Trump suggested he could soon declare the Strait of Hormuz a “territory of the United States.”
Iranian Foreign Minister Abbas Araghchi stated that no negotiations are currently underway between Tehran and Washington, emphasizing that the US must meet Iran’s conditions before shipping can resume through the strategic waterway. At the same time, Russia is reportedly grappling with fuel shortages as Ukrainian attacks on oil refineries continue.
Investors are also looking ahead to the American Petroleum Institute (API) weekly crude oil inventory report due on Tuesday. A larger-than-expected inventory draw could signal stronger demand and provide additional support for oil prices, while a bigger-than-forecast build may point to weaker consumption or oversupply, weighing on WTI.
Oil demand outlook weakens as IEA and OPEC cut forecasts
Commerzbank highlighted that both the International Energy Agency (IEA) and OPEC have adopted a more cautious stance on oil demand. The bank noted that both organizations lowered their 2026 demand growth forecasts by 200,000 barrels per day. The IEA now projects demand growth of 1.6 million barrels per day, while OPEC expects a more modest increase of 580,000 barrels per day, reflecting a significant difference in their views on global consumption trends.
On the supply side, Commerzbank pointed out that oil production from countries outside the OPEC+ alliance is expected to increase by 690,000 barrels per day, according to the IEA, potentially adding to supply and easing market tightness in the months ahead.
Technical Analysis: WTI remains range-bound with a mildly positive bias
On the daily timeframe, WTI crude oil maintains a neutral-to-slightly bullish outlook. Prices are holding above the Bollinger Band midline, indicating underlying support, though upside momentum remains constrained below the 100-day Simple Moving Average (SMA) at around $86.40. This setup suggests the market is consolidating within a broader corrective trend. Meanwhile, the Relative Strength Index (RSI) near 53 reflects balanced momentum, offering little evidence of a strong directional breakout.
Looking higher, the 100-day SMA at $86.40 serves as the first key resistance level. A sustained move above this barrier could pave the way toward the upper Bollinger Band near $90.10, which marks the next significant upside target.
On the downside, immediate support lies around $81.60, where the 20-day SMA converges with the Bollinger midpoint. A decisive break below this zone could expose the lower Bollinger Band near $73.10, an area where stronger buying interest may re-emerge and help stabilize prices.
Canadian Dollar strengthens as softer US Dollar and firmer Oil prices provide support
- USD/CAD weakens after a series of softer-than-expected US economic reports prompted traders to scale back expectations for additional Fed rate hikes.
- US Retail Sales declined by 0.6% in July, reinforcing market views that the Federal Reserve may take a less aggressive policy stance.
- Rising geopolitical tensions in the Middle East and fresh US sanctions on Iran supported crude oil prices over the weekend, benefiting the Canadian Dollar.
USD/CAD remains under pressure for a third straight session, hovering near 1.3870 during Monday’s Asian trading hours as the US Dollar weakens on softer US economic data and fading expectations for further Federal Reserve tightening.
Data released by the US Census Bureau on Friday showed Retail Sales fell 0.6% month-over-month in July after increasing 0.2% in June, missing forecasts for a 0.1% gain. On a yearly basis, Retail Sales growth slowed to 5.0% from 6.8% previously.
A string of weaker US indicators, including CPI, PPI, and Retail Sales, has prompted investors to reassess the Fed’s policy outlook. According to the CME FedWatch Tool, markets now see a 33.1% probability of a rate hike next month, down from 44% a week earlier.
The Canadian Dollar continues to find support from stronger crude oil prices, weighing further on USD/CAD. WTI crude extends its advance for a second consecutive day and trades near $81.80 per barrel. Oil prices remain underpinned by escalating Middle East tensions, with investors concerned about potential supply disruptions following fresh Israeli strikes in Lebanon over the weekend that reportedly killed 11 people, including a senior Hezbollah commander.
Oil supply concerns intensify
Analysts at Commerzbank warn that production disruptions across the Gulf region are tightening the global oil market. The bank estimates supply losses could reach 4.3 million barrels per day, creating a substantial shortfall and leaving the market significantly undersupplied this year. Referring to the latest IEA projections, Commerzbank noted that the third-quarter supply deficit is now expected to reach 1.8 million barrels per day, roughly 1 million barrels per day higher than previously anticipated.
Meanwhile, geopolitical uncertainty remains elevated as US President Donald Trump prepares additional sanctions on Iran to increase pressure on Tehran. Investors are also closely monitoring the expiration of the temporary US-Iran ceasefire agreement later on Monday, while negotiations aimed at resolving the conflict and reopening the Strait of Hormuz continue to show little progress.
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