- WTI drifts lower for the second straight day as Middle East diplomacy hopes ease supply concerns.
- Attacks on Saudi Arabia keep the geopolitical risk premium in play and help limit losses for oil prices.
- The bullish technical setup further warrants caution before positioning for any meaningful decline.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts some sellers for the second straight day, trading below the $100.00 psychological mark during the Asian session on Tuesday. Meanwhile, the commodity remains within striking distance of a five-month high set last Friday as traders await further developments surrounding the Middle East crisis.
The optimism over a potential resolution in the US-Israeli war on Iran eases some fears of supply disruption and exerts pressure on crude oil prices. However, the geopolitical risk premium remains in play amid stalled US-Iran talks and renewed attacks by Iran-backed Houthis on Saudi Arabia. Adding to this, Lebanese armed group Hezbollah is reportedly preparing for a possible resumption of hostilities with Israel. This dampens hopes of immediate stability in the region and should help limit the downside for the black liquid.
From a technical perspective, crude oil prices maintain a bullish near-term bias above the 100-period Simple Moving Average (SMA) on the 4-hour chart, and all key Fibonacci retracement supports between $86.58 and $99.42. That said, the Relative Strength Index (RSI) at 50.69 has eased back toward neutral from prior overbought readings. Adding to this, the Moving Average Convergence Divergence (MACD) has slipped into negative territory, hinting at a consolidative phase rather than a clear reversal within an otherwise supported uptrend.
Meanwhile, immediate support is seen at the 23.6% Fibo. retracement at $99.42, followed by the 38.2% retracement at $96.97 and the 50% level at $94.98, which cluster around the 100-period SMA at $94.74 and reinforce a broader demand zone. Deeper pullbacks would eye the 61.8% retracement at $93.00 and lower Fibonacci levels at $90.18 and $86.58. On the topside, the recent cycle high anchor near $103.39 stands as the next significant resistance level that bulls would need to clear to extend the rally witnessed since the start of this month.
Leave A Comment