WTI advances above $92.00, highest since July as Hormuz tensions stoke supply concerns
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts follow-through buying for the second straight day and climbs to its highest level since July 23 during the early part of the European session on Tuesday. Bulls now look to build on the momentum beyond the $92.00 mark amid the widening US-Iran confrontation.
In the latest development surrounding the Middle East crisis, US forces struck and disabled three Iranian oil tankers over the weekend. This comes in a retaliation for an Islamic Revolutionary Guard Corps (IRGC) ballistic missile attack targeting two US Navy warships in the region, which keeps the geopolitical risk premium in play and continues to support crude oil prices.
Oil risk premium underpinned as US-Iran tensions resurface
According to commodity strategists at TD Securities, the latest flare-up in geopolitical tensions is reinforcing the vulnerability of the current détente in energy markets. They stress that “renewed hostilities between the US and Iran continues to highlight the fragility of any non-concrete deal or short-term de-escalation,” underscoring how quickly sentiment around supply security can shift in the absence of a durable agreement.
Meanwhile, Iran threatened to retaliate against any new US attacks on its assets, warning that energy infrastructure across the Gulf was vulnerable. Moreover, Iran’s security chief, Mohsen Rezaei, said that Tehran is preparing to enforce a full blockade around the Strait of Hormuz in response to economic sanctions. Intensifying fears of a prolonged disruption to oil supplies.
This turns out to be another factor acting as a tailwind for the black liquid and validates the positive outlook, suggesting that any corrective pullback is more likely to be bought into and remain limited. On the top side, the July swing high, around the $93.25 region, could act as an immediate hurdle, which, if cleared, should pave the way for further upside in the near term.
WTI daily chart
Technical Analysis
The near-term bias is bullish as WTI holds above the 100-day Simple Moving Average (SMA) at roughly $85.24 and has reclaimed the 61.8% Fibonacci retracement at about $91.59. Moreover, momentum indicators stay constructive. In fact, the Relative Strength Index (14) is pressing into the mid-60s without yet signaling extreme overbought conditions. Meanwhile, the Moving Average Convergence Divergence (MACD) line remains above zero and its signal line, with a positive, slightly expanding histogram that hints at persistent upside pressure.
On the downside, initial support is now seen at the 50% retracement around $86.78 and the 100-day SMA at $85.24, which together form a broader demand zone if prices correct lower. On the topside, a sustained break higher would expose the 78.6% Fibo. retracement at approximately $98.44, with the prior swing high at $107.16 acting as a subsequent resistance barrier if the current bullish momentum extends.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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