WTI crude rebounds above $68 as dollar weakness lifts oil markets

WTI crude climbed above $68 a barrel on Thursday, rebounding from its weakest level since late February, as a pullback in the US dollar after disappointing payrolls data supported dollar-denominated commodities.

"The dollar's pullback after the NFP report gave oil traders a reason to take profits off the table after the strong selloff," said Vladimir, an independent trader with over 18 years of experience in financial markets.

WTI rose from support at $66.50-$67.00, where it had settled near multi-month lows, to trade above $68.00 during the European session. Brent crude also advanced, recovering toward the $72.00-$72.50 support zone after dipping below that level. The Relative Strength Index on WTI stood at 27.58, highlighting oversold conditions that often precede a corrective bounce. The MACD indicator remained negative at -0.43, showing the broader downtrend remains intact despite the short-term recovery.

The rebound comes as the market digests shifting supply dynamics in the Strait of Hormuz, where shipping traffic has resumed after a brief disruption, and prepares for potential changes to the passage regime that could reshape cost structures for global crude flows.

Supply Dynamics Reshape as Hormuz Traffic Normalizes

Saudi exports have reached 90 percent of pre-war levels, while the UAE raised its exports to pre-war levels earlier, according to recent reports. The market is preparing for a flood of oil through the Strait of Hormuz as tensions ease. A cargo ship that was reportedly hit by Iran resumed its transit through the strait with the crew, vessel and cargo unharmed, according to Taiwanese shipping operator Evergreen Marine.

However, the future regime in the strait remains uncertain. European countries believe ships will have to pay fees to Iran and Oman for passage through the world's key oil route, while the US has firmly opposed any such fees. This unresolved issue could become a new source of price volatility.

Technical Levels to Watch

On the upside, WTI faces its first major test at the 200-day simple moving average of $73.17. A break above that level would open the path toward the 61.8 percent Fibonacci retracement at $77.67. On the downside, if the rebound fizzles, the next support lies at $66.50-$67.00, with a break below exposing the year-to-date low of $56.06 set in January.

For Brent, the immediate resistance sits at $72.00-$72.50. A sustained move above that level targets $77.00-$77.50. Failure to hold current levels would expose the $67.00-$67.50 support zone.

Cross-Asset Context

The dollar pullback followed a disappointing Non Farm Payrolls report, which reduced bets on a hawkish Federal Reserve. The US 10-year Treasury yield narrowed to 4.37 percent from 4.39 percent, while the dollar weakened against major currencies. A weaker dollar is bullish for oil and other dollar-denominated commodities as it makes them less expensive for buyers holding other currencies.

Natural gas remained range-bound near the $3.20-$3.25 support level. The EIA Weekly Natural Gas Storage Report showed an increase of 87 billion cubic feet, above the analyst forecast of 81 billion cubic feet. Stocks are 23 billion cubic feet below last year but 175 billion cubic feet above the five-year average for this time of year.

The oil market is at a critical juncture. The rebound from multi-month lows could signal a bottoming pattern if supported by sustained dollar weakness and continued normalization of Hormuz traffic. But the oversold bounce faces significant technical resistance, and the broader supply picture — with Saudi and UAE exports returning to pre-war levels — suggests any rally may be capped unless demand-side catalysts emerge.

This article is for informational purposes only and does not constitute investment advice.