West Texas Intermediate (WTI) crude oil prices extended their rebound on Wednesday, driven by escalating tensions in the Middle East that have disrupted oil flows through the Strait of Hormuz and the Red Sea [1]. At the time of reporting, WTI was trading around $86.20, after reaching an intraday high of $87.83, marking its highest level since June 11 [1]. The US military conducted its eleventh consecutive night of strikes against Iran, while Tehran retaliated with attacks targeting Bahrain, Kuwait, and Jordan [1]. Additionally, three tankers carrying Saudi crude reportedly reversed course in the Red Sea following threats from Iran-backed Houthi forces [1].
From a technical perspective, WTI has staged a sharp recovery after retesting the pre-war level near $67 earlier in the month [1]. The price reclaimed the 200-day Simple Moving Average (SMA) around $74 and is now testing the 100-day SMA near $88 [1]. Technical indicators suggest continued upward momentum: the Relative Strength Index (RSI 14) has climbed to 66.61, approaching overbought territory, and the Moving Average Convergence Divergence (MACD) remains positive, with the MACD line above the signal line and a widening positive histogram [1].
On the downside, initial support is seen at the $80.00 psychological level, followed by the 200-day SMA at $74, with a deeper pullback potentially bringing the pre-war support zone near $67.00 back into focus [1]. On the upside, the 100-day SMA at $88 is the first resistance level, and a decisive break above it could pave the way for a move toward the horizontal resistance zone around $95.00 [1].
The ongoing geopolitical instability and disruptions to oil supply routes have created persistent upside pressure on WTI prices, with technical signals indicating the potential for further gains if resistance levels are breached [1].
CONCLUSION
WTI oil prices have surged to their highest levels since June 11 amid heightened Middle East tensions and disruptions to key shipping routes. Technical indicators point to continued bullish momentum, with further gains possible if resistance levels are surpassed. The market remains highly sensitive to ongoing geopolitical developments.