WTI Oil picks up to $89.00 as US announces a total blockade of Hormuz

• WTI Oil prices bounce up to $89.00 from three-week lows below $85.00.
• The announcement of a total blockade of the Strait of Hormuz has reversed the downtrend.
• Oil prices had lost nearly 8% over the previous two days amid speculation of a new round of US-Iran peace talks.

Oil prices have bounced up during the Asian session, as the US military announced a total blockade of the Strait of Hormuz on Tuesday, increasing the chokehold on supply and putting the new round of talks with Iran into question. The price of the US benchmark West Texas Intermediate (WTI) barrel appreciated about $4 during the Asian session, retracing previous daily losses, and reaching levels near $89.00.

WTI prices had lost nearly 8% over the previous two days, to hit fresh three-week lows at $84.86 earlier on Tuesday amid rumours that the US and Iran maintained contacts to resume peace talks. US President Trump finally confirmed those hopes, affirming that negotiations might restart in the next two days.

Technical Analysis: Support around $84.50 is holding bears

The technical picture shows the WTI US Oil in a bearish bias within a broader horizontal channel, with support in the area of $84,50 holding downside attempts for now.

Indicators in the 4-hour chart remain in bearish territory. The Relative Strength Index (RSI) is recovering from oversold territory but is still below 50, and the Moving Average Convergence Divergence (MACD) shows an expanding negative histogram highlighting the weak momentum.

A clear break below $84.46 would confirm a deeper correction from the early March highs, aiming for the $80.00 psychological level and the March 10 low, near $76.00. On the topside, bulls face the next significant barrier at the weekly high of $98.10, followed by the April 6 and 7 highs, near $106.28, and the mentioned March 9 high, at $113.16.