- WTI sticks to a bullish bias as US-Iran tensions keep the geopolitical risk premium in play.
- Clashes over the Strait of Hormuz fuel supply concerns and also support the black liquid.
- The technical setup backs the case for an extension of an over one-week-old uptrend.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – trades below the $90.00 mark during the Asian session on Friday and remains close to its highest level since July 24, touched earlier this week. The commodity remains on track to register its steepest weekly gains since mid-July amid renewed US-Iran hostilities and supply concerns due to clashes over the Strait of Hormuz.
In further developments surrounding the Middle East crisis, Iran targeted US military bases in Kuwait and the United Arab Emirates (UAE) on Thursday. Meanwhile, South Korea is reportedly preparing to deploy military assets to support freedom of navigation in the strategic Strait of Hormuz and aims to dispatch them before the end of the year. This keeps the geopolitical risk premium in play and validates the near-term positive outlook for crude oil prices.
Even from a technical perspective, the near-term bias stays bullish as the black liquid holds above the 50% Fibonacci retracement level of the April-July decline and the 100-day Simple Moving Average (SMA). Moreover, constructive momentum indicators suggest a firm underlying floor after the latest advance. The Relative Strength Index (14) is hovering near 63, while the Moving Average Convergence Divergence (MACD) line remains in positive territory.
This, in turn, hints that buyers retain the upper hand even as conditions edge toward overbought. However, a move beyond the initial hurdle near the 61.8% Fibo. retracement at $92.01 is needed to back the case for additional gains towards the next barrier near $98.76 at the 78.6% retracement. A sustained break higher would expose the prior swing high around $107.36.
On the downside, immediate support comes at the 50% retracement at $87.26, followed by the 100-day SMA near $85.17. A deeper pullback would find additional demand around $82.52 and then $76.65, where lower Fibonacci levels converge to reinforce the broader uptrend.
Leave A Comment