WTI falls 16% in May, remains below key moving averages

West Texas Intermediate crude fell about 16% in May, recording its first monthly decline after four months of gains. From May 1 to May 28 WTI futures suffered a double-digit loss and stood as the weakest major cross-asset performer for the month.

The price drop followed signs of easing in the three-month US–Iran conflict, including a tentative 60-day ceasefire extension and renewed talks on Iran’s nuclear program. Those developments raised the prospect of safer transit through the Strait of Hormuz and reduced the geopolitical risk premium on oil.

Technically, WTI has traded below its 20-day and 50-day moving averages since May 25 and is moving inside a minor descending channel formed after the May 20 high. Hourly momentum indicators show the relative strength index below 50 and not yet in oversold territory.

Near-term support sits at $87.60, a level tied to an April 20 price gap. A break below that level could expose a support cluster between $81.94 and $85, defined by lows on April 17 and March 11 and the lower boundary of the descending channel. On the upside, $95.10 is the key short-term pivot; a sustained move above it would be required to neutralize the immediate downtrend. Additional resistance points include the May 26 high at $97.40, the $100 area near the 20- and 50-day averages, and $102.56, which aligns with a 61.6% Fibonacci retracement of the recent decline.

Market commentary from a senior analyst at OANDA highlighted the combination of an easing geopolitical backdrop and weakening technicals for the near-term outlook. The analyst noted an intra-session monthly decline of roughly 16% late in May and flagged the potential for further downside over the next one to three days unless prices reclaim $95.10.

Traders and portfolio managers will be monitoring momentum around the $87.60 and $81.94–$85 zones to assess whether sellers remain in control or buyers step in to stabilize prices. Confirmation of longer-term ceasefire arrangements or clear progress in talks could prompt position adjustments if headlines provide further clarity.