Crude Oil sees sharp spike as Middle East tensions continue to sizzle
- WTI surged past $110.00 in Asian hours on Strait of Hormuz fears before profit-taking pulled the price back toward $93.00.
- The Strait of Hormuz closure is entering its second week, with Iraq, Kuwait, and Saudi Arabia all cutting production as Gulf storage nears capacity.
- US February CPI data due Wednesday could be further complicated by the energy price shock, with January headline inflation running at 2.4% YoY.
West Texas Intermediate (WTI) Crude Oil gained about 5% on Monday, but the headline figure disguised a wild session. Prices gapped open sharply during Asia's early market session, well above Friday's close and surging past $110.00 to print a high above $113.00, testing the highest barrel bids since 2022. Crude Oil markets have pulled all the way back below $95.00, and the resulting daily candle carries a massive upper wick, signaling heavy profit-taking after the overnight spike. Despite the reversal, Crude Oil is still holding above last week's close, which capped the largest weekly gain in WTI futures history at roughly 36%.
The Strait of Hormuz has been effectively shut since March 2, when the Islamic Revolutionary Guard Corps (IRGC) confirmed the closure and warned that any vessel attempting to pass would be targeted. The blockade, triggered by joint US-Israeli strikes on Iran beginning February 28, has halted the transit of roughly 20% of global daily oil supply. Iraq has already cut around 1.5 million barrels per day as onshore storage fills up, Kuwait has reduced output, and Saudi Arabia began its own production cuts on Monday. Goldman Sachs has warned that if the disruption extends beyond 30 days, crude could reach $140.00 to $150.00 per barrel. US President Donald Trump has ruled out negotiating with Iran and said the US Navy will begin escorting tankers through the strait.
On the data front, the Bureau of Labor Statistics (BLS) releases the US February Consumer Price Index (CPI) data on Wednesday. January headline CPI last came in at 2.4% year-over-year, and the sharp run-up in energy costs since late February is likely to filter through into coming prints. Weekly Energy Information Administration (EIA) crude inventory data, also due Wednesday, last showed a build of 3.5 million barrels in the prior report.
WTI daily chart
Technical Analysis
In the daily chart, WTI US OIL trades at $93.15. The near-term bias is bullish as price extends well above both the 50-day and 200-day exponential moving averages, which are rising and aligned in a classic trending configuration. The strong upside acceleration from the mid-$70s into the high $80s and now low $90s confirms firm buying pressure, while the Stochastic oscillator holding in overbought territory reflects persistent momentum rather than an immediate reversal signal. As long as price holds above the shorter EMA cluster, pullbacks are likely to be treated as corrective within the broader advance.
Immediate support emerges near $88.50, where the latest swing area aligns above the rising 50-day EMA around $66.35 and the 200-day EMA near $63.55, forming a wide but robust demand backdrop. A deeper correction would need to break through the mid-$80s and then the $80.00 handle to weaken the current bullish structure on the daily timeframe. On the upside, psychological resistance lies at $95.00, followed by the $98.00 region, where overbought conditions could trigger profit-taking. A sustained break above $95.00 would signal continuation of the uptrend and open the way toward the $100.00 area.
(The technical analysis of this story was written with the help of an AI tool.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
