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October WTI crude oil futures are trading at $101.26 early Friday, up $10.04 or 11.01% for the week so far. The contract traded as low as $90.87 before reaching $104.46, its strongest level since May.
Last week, the market was testing whether escorted cargoes and alternate routes could keep enough Gulf oil moving to reduce the war premium. This week, tanker attacks increased around the Strait of Hormuz, Saudi energy facilities came under attack, and the supply threat spread toward the Red Sea.
WTI did not break $100 because every Middle East barrel disappeared. It broke $100 because the number of barrels that cannot reach the market keeps growing while the routes available to move the remaining supply are getting more dangerous.
The week started with another escalation between U.S. and Iranian forces. U.S. forces struck Iranian oil tankers after attacks targeting American warships. Iran later said it attacked ships near the Strait of Hormuz after additional U.S. strikes on Iranian tankers.
Hormuz remained at the center of the trade, but the threat expanded when Houthi forces attacked Saudi energy facilities and seized the port of Mocha on Yemen's Red Sea coast. That put shipping near the Bab el-Mandeb Strait back in focus.
Hormuz was already unreliable. Now another route used to move Middle East oil is under pressure.
Middle East Shut-Ins Reached 6.7 Million Barrels Per Day
October WTI crude oil futures are trading at $101.26 early Friday, up $10.04 or 11.01% for the week so far. The contract traded as low as $90.87 before reaching $104.46, its strongest level since May.
Last week, the market was testing whether escorted cargoes and alternate routes could keep enough Gulf oil moving to reduce the war premium. This week, tanker attacks increased around the Strait of Hormuz, Saudi energy facilities came under attack, and the supply threat spread toward the Red Sea.
WTI did not break $100 because every Middle East barrel disappeared. It broke $100 because the number of barrels that cannot reach the market keeps growing while the routes available to move the remaining supply are getting more dangerous.
The week started with another escalation between U.S. and Iranian forces. U.S. forces struck Iranian oil tankers after attacks targeting American warships. Iran later said it attacked ships near the Strait of Hormuz after additional U.S. strikes on Iranian tankers.
Hormuz remained at the center of the trade, but the threat expanded when Houthi forces attacked Saudi energy facilities and seized the port of Mocha on Yemen's Red Sea coast. That put shipping near the Bab el-Mandeb Strait back in focus.
Hormuz was already unreliable. Now another route used to move Middle East oil is under pressure.
Middle East Shut-Ins Reached 6.7 Million Barrels Per Day
Middle East crude oil production shut-ins averaged 6.7 million barrels per day in August, up from 5 million in July. The EIA expects shut-ins to average about 5.7 million barrels per day during the fourth quarter.
Global inventories have already fallen by roughly 400 million barrels this year. The EIA expects inventories to keep declining through the end of 2026 and Middle East production and trade flows to remain below pre-conflict levels into next year.
The market is no longer pricing only the possibility of a supply disruption. Millions of barrels are already shut in.
OPEC+ left its October production policy unchanged Sunday after six consecutive monthly increases. The group has been restoring earlier voluntary cuts, but the war has prevented production from reaching planned levels.
OPEC's 11 members produced 19.71 million barrels per day in August, down 640,000 barrels per day from July. Saudi export disruptions and lower Iranian shipments contributed to the decline.
OPEC can announce higher production targets. It cannot guarantee those barrels are produced, loaded and delivered. That difference became more important this week as WTI moved through $100.
China had helped contain crude prices earlier in the conflict as Middle East supply became more expensive and difficult to obtain. That cushion is shrinking.
Chinese refiners increased purchases in recent weeks, including barrels from West Africa, Canada and South America. The world's largest crude importer is returning to the physical market while Middle East supply remains constrained.
Weak Chinese demand had been one of the stronger arguments against higher crude prices. That argument weakened this week.
OPEC gave sellers something Thursday when it lowered its 2026 world oil demand growth forecast to 380,000 barrels per day. It was the group's fifth consecutive downward revision.
The problem is timing. Slower demand growth is competing against supply that is disappearing now. OPEC production fell when the group was trying to increase it. Middle East shut-ins rose, and Chinese refiners returned to the physical market.
For now, the market is trading available barrels rather than demand forecasts.
U.S. commercial crude inventories fell 391,000 barrels to 424.1 million barrels during the week ended September 4. The draw was smaller than expected. Gasoline inventories increased 1.3 million barrels, and distillates rose 2.1 million barrels.
Normally, that mixed report could slow a rally. This week it barely mattered. WTI's direction was being set by the Middle East.
Weekly October WTI Crude Oil Futures Technical Analysis
October WTI crude oil futures are sharply higher heading into the end of the week. This week’s rally has been highlighted by trader willingness to aggressively take out offers rather than wait for dips and passively bid. This is typically a sign of real buying and not just short-covering.
The current move is also being controlled by momentum. This means that a volatile chart pattern will signal a top rather than a specific resistance level. The chart pattern that typically creates the top in this kind of trading environment is the closing price reversal.
Now that October WTI futures have crossed to the bullish side of the psychological $100 level, we can start identifying potential upside targets. They include $103.15, $117.63, $119.48, and $123.00. The big jump from $103.15 to $117.63 indicates the potential for massive speculative buying.
We’re bullish because of the strong higher-high, higher-low chart pattern. A break in this pattern will indicate that buying may be slowing and the selling may be increasing. However, it will not signal a change in trend.
Essentially, the trend is up, and the buying is strong. A top or a change in trend will not necessarily be triggered by a resistance area, but rather a break in the pattern.
The direction of the Weekly October Crude Oil futures contract for the week ending September 18 is likely to be determined by trader reaction to $100.00.
A sustained move above $100.00 will signal the presence of strong buyers. This will put the market in a position to break out above $103.15 with the possibility of an acceleration into $117.63 to 123.00.
A sustained move under $100.00 will indicate the buying is slowing and the selling pressure is increasing. If it creates enough downside momentum, then $90.87 will become the next target. A trade through this level will send a strong signal that the rally is weakening.
WTI is higher by 11% because the supply problem expanded during the week. Hormuz remains restricted, tanker attacks increased, and the Houthi advance put another export route in play.
The bearish case has weaker demand forecasts, high U.S. production, and the possibility that alternative shipping routes gradually restore Middle East flows.
Next week starts with WTI above $100 and the market firmly in a momentum phase. Chinese buying, tanker traffic and Middle East shut-ins will determine whether the physical market can support the rally.
A sustained improvement in shipping flows would take premium out of crude quickly. More tanker attacks or another reduction in available Middle East barrels would keep the supply side in control. The market has oil. The problem is getting enough of it to the buyers who need it.
Technically, the trend is strong, and there aren’t many solid resistance levels. Historically, rallies have just died on the vine at seemingly random prices. The key to picking a top, for example, will not be guessing resistance, but identifying the shift in momentum. Chart pattern rather than price is more important at this time. Someone has to keep feeding the bull, but when that stops, prices could tumble.
Until then, continue to watch for buyers taking out offers rather than waiting for dips. That will be a sign that momentum is still driving the price action. A shift from aggressive buying to buyers waiting for lower prices would be an early sign that momentum is fading.
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