When the Strait of Hormuz closed in February, WTI crude prices shot up well above the $100 per barrel level. Oil prices fought to rally back, only to lose momentum each time.
WTI crude closed below $85/bbl on the weekend. Its failure to hold above $95 is a bearish sign. The oil market might enter a bear phase.
The U.S. revealed that it helped oil tankers traverse the Strait at night. That would explain why oil supplies did not shrink by as much as was first thought. Without transponders to track ship movements, experts did not have the data to measure oil shipment volumes.
Energy E&P firms like Devon Energy (DVN) are trending lower, while Enterprise Products (EPD) shares are in a trading range. Oil and gas integrated giants like Exxon Mobil (XOM) and ConocoPhillips (COP) rallied since April at lower highs. This is a bearish pattern that suggests that energy stocks might sell off.
Investors saw this pattern before. Gold (GLD) peaked at nearly $510 in late January. When the U.S. entered a war with Iran, gold rallies faded quickly. GLD stock closed at $386.54 on June 12. Silver (SLV) followed this bearish pattern. SLV stock lost nearly 5% in 2026.
The oil shortage will persist even if the Strait reopens fully. The demand destruction for energy, such as China importing less, suggests that oil prices will decline steadily.
