WTI advances to mid-$90.00s, fresh high since July 24 amid escalating US-Iran tensions
- WTI attracts follow-through buying for the third straight day and seems poised to climb further.
- Escalating US-Iran tensions fuel global supply concerns and continue to underpin crude oil prices.
- The technical setup favors bulls and backs the case for a further near-term appreciating move.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – scales higher for the third straight day – also marking the fifth day of a positive move in the previous six – and climbs to a fresh high since July 24 during the Asian session on Wednesday. The black liquid currently trades around mid-$90.00s, up 1.20% for the day, and seems poised to prolong the weekly uptrend amid escalating US-Iran tensions.
In the latest developments surrounding the Middle East crisis, US forces struck Islamic Revolutionary Guard Corps targets in retaliation for attempted attacks on commercial shipping in the Strait of Hormuz and on American service members in the region. Meanwhile, Iran said it launched heavy ballistic missile and drone attacks on US-linked targets in Jordan and the UAE. This underscores the continued risks to commercial shipping in the region and raises supply concerns, underpinning crude oil prices.
Us-Iran tensions underscore fragility of energy market truces
According to strategists at TD Securities, the latest flare-up in tensions between the US and Iran is a stark reminder that "the latest escalation in the conflict between the US and Iran continues to highlight how flimsy any deal or MoU headlines really are." They argue that the renewed confrontation reinforces just how fragile existing arrangements around key energy chokepoints remain, even as more flows are rerouted via US-backed corridors, keeping the risk premium in Energy markets firmly in focus.
Moreover, Russia’s decision over the weekend to extend its diesel export ban until September 30 added to concerns over refined fuel supplies and acts as a tailwind for the black liquid. Meanwhile, US President Donald Trump said on Sunday that oil secured under a newly announced deal with Venezuela would be used to replenish the Strategic Petroleum Reserve. Hence, it remains unclear how quickly the Venezuelan deal could translate into additional supplies, validating the positive outlook for oil prices.
WTI daily chart
Technical Analysis
WTI US Oil maintains a constructive bullish tone above the 100-day Simple Moving Average (SMA) at $85.12 and the 50.0% Fibonacci retracement at $87.20. The reclaim of these supports suggests dips are likely to find buyers while the advance remains capped for now below the 61.8% retracement at $91.88.
The latter is followed by the 78.6% level at $98.55, with the prior swing high near $107.04 acting as a more distant barrier. On the downside, initial support is aligned at the 50.0% retracement around $87.20, ahead of the 100-day SMA at $85.12, with deeper pullbacks potentially targeting the 38.2% retracement at $82.51 and, if weakened further, the $76.72 and $67.36 Fibonacci floors.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
