Oil futures edged higher Tuesday after steep overnight losses, with chart indicators suggesting the market had become oversold and was due for a bounce, according to The Wall Street Journal.
After touching a session low of $72.69 a barrel — a decline of 1.6% — West Texas Intermediate crude reversed course and was last seen gaining 0.5% to $74.21 a barrel. The international benchmark, Brent crude, held a loss of 0.7% at $77.33 a barrel.
FOREX.com’s Fawad Razaqzada pointed to the crude market’s extended losing streak as a setup for a snapback, telling The Wall Street Journal that weeks of downward pressure had pushed momentum gauges into territory historically associated with near-term recoveries. A ceiling near $76.10 a barrel — a level that spent much of the year acting as a floor before prices broke below it — now represents the first significant hurdle for any rally, he said.
Driving the earlier selloff was a U.S. Treasury announcement permitting Iranian oil to be produced, shipped, and sold — and allowing American buyers to receive that crude and pay for it in dollars — under a temporary authorization running through Aug. 21, according to CNBC. The move followed Vice President JD Vance saying Tehran had agreed to allow nuclear inspectors to return.
Saxo Bank analysts said the waiver opens a path for moving cargo that had been building at Iranian terminals — roughly 30 million barrels departed those ports last week alone. Separately, tanker-tracking data captured significant volumes of crude and petroleum products passing through the Strait of Hormuz over the weekend, a sign to those analysts that regional supply routes may be normalizing.
Uncertainty over Hormuz traffic provided some floor for prices. Conflicting signals added to market uncertainty: Tehran announced a closure of the strait over the weekend, a claim that U.S. Central Command flatly rejected by asserting that vessels could pass freely, according to CNBC. Trump separately claimed Monday’s Hormuz throughput reached a record 19 million barrels, a number CNBC was unable to independently confirm. A joint communique from Oman and Iran on Tuesday underscored both countries’ jurisdictional claims over the waterway’s territorial waters.
Despite the bearish tilt in oil balances, Ritterbusch & Associates flagged an underappreciated bullish undercurrent: inventories have eroded to dangerously thin levels, a situation the firm expects to linger for weeks. When production eventually turns higher, the dual task of rebuilding commercial stocks and replenishing strategic petroleum reserves should lend price support well into next year, according to the firm.
The current framework for U.S.-Iran negotiations emerged from weekend talks in Switzerland, where Qatar and Pakistan mediated a 60-day agreement aimed at reaching a final resolution. The deal came after weeks of market turbulence that began when the U.S. and Israel struck Iran and Tehran retaliated by targeting commercial vessels in the strait, triggering what analysts described as the largest disruption to global oil markets in history.
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