FX.co ★ CL/Crude Oil

On Tuesday morning, the price of US West Texas Intermediate (WTI) crude oil approached $99.15 a barrel in European trading, reaching its highest level in nearly a month. Global energy markets are weighing escalating geopolitical risks in the Middle East against the continued flow of oil from the Arabian Gulf. Iran’s Revolutionary Guard issued an official statement saying that while Tehran has not completely closed the Strait of Hormuz, it remains capable of extending its naval blockade to include the Bab el-Mandeb Strait and the Suez Canal. This move has heightened tensions. Iranian Foreign Minister Abbas Araqchi issued a stern warning to the United States and Israel, urging them to refrain from launching further attacks and emphasizing that there are strategic objectives at stake among the various parties in the region. Adding to concerns about supply disruptions, the Houthis claimed responsibility for attacks targeting key Saudi infrastructure, including King Khalid International Airport in Riyadh, Saudi Aramco facilities in Yanbu on the Red Sea coast, the Shaybah oil field, and Saudi naval vessels. Hamad Hussain, a commodities economist at Capital Economics Ltd., confirmed that energy price risks remain heavily skewed to the upside. He noted that the escalating maritime conflict significantly increases the likelihood of a renewed shortfall in immediate oil supply and a sustained rise in prices. Meanwhile, crude oil exports from the Gulf region continue to accelerate. US Energy Secretary Chris Wright confirmed that despite ongoing restrictions on refined product shipments, total crude oil flows have recovered to approximately 80% of pre-conflict levels. Market participants are currently focused on the American Petroleum Institute's (API) weekly oil inventory report. A larger-than-expected decline in crude oil inventories would indicate strong demand, supporting West Texas Intermediate (WTI) crude prices; conversely, an unexpectedly high inventory level could highlight a supply surplus and weaken the upward momentum in prices. Meanwhile, the crude oil market is facing conflicting fundamental signals: a complex interplay between severe supply risks in the Middle East and regulatory changes related to the implementation of US sanctions. Energy analysts at Rabobank noted that oil prices initially rose following confirmation of the maritime disaster in the Strait of Hormuz. Iran claims that two commercial oil tankers carrying up to 4 million barrels of crude oil struck a mine. However, market optimism faded after President Trump signed a temporary waiver, lifting the sanctions and tariffs that were to be imposed under the Graham Act. Rabobank points out that implementing such punitive measures directly contradicts the US government's strategic objective of curbing domestic fuel prices ahead of the upcoming midterm elections. The bank also adds that major buyers of Russian energy products, including China, India, Turkey, and the European Union, remain highly vulnerable to future regulatory changes that could significantly disrupt global energy distribution channels. From a technical analysis perspective, West Texas Intermediate crude oil is trading at around $99.13 per barrel on the daily chart, maintaining strong short-term upward momentum. The market price has broken above the 100-day simple moving average (at $84.57) and the 20-day middle Bollinger Band (around $92.47). Prices are moving strongly toward the upper Bollinger Band resistance level at $99.13, while momentum indicators remain supportive, with the 14-day Relative Strength Index (RSI) at 64.43, reflecting a strong bullish bias but not yet entering overbought territory. On the upside, immediate technical resistance lies near the upper Bollinger Band at $99.13, where consolidation or a pullback is likely before buyers attempt to break through this resistance and challenge the psychological level of $100. On the downside, initial technical support lies near the previous day's opening price at $99.13, followed by the middle Bollinger Band at $92.47. A deeper pullback could lead to prices testing the lower Bollinger Band at $85.82 and the 100-day moving average at $84.57, which together form strong support for the overall uptrend.