WTI rebounds as Middle East tensions clash with Russia-Ukraine peace hopes

West Texas Intermediate (WTI) US Oil rises by 1.00% on Monday, trading around $91.90 at the time of writing. Crude Oil prices are supported by escalating geopolitical tensions in the Middle East, despite prospects of an energy ceasefire between Russia and Ukraine that could ease supply concerns.

The rebound in Oil prices comes amid renewed fears of supply disruptions following attacks by Iran-backed Houthi militants against Saudi Arabia over the weekend. Riyadh's King Khalid International Airport was targeted twice, with the initial strike reportedly killing 12 people and injuring more than 300.

United States (US) President Donald Trump warned that Washington could join Saudi Arabia in retaliatory strikes against the Houthis in Yemen. He also issued a warning to Iran, raising concerns about a broader regional escalation that could threaten energy infrastructure and Oil shipments.

Meanwhile, maritime security risks remain elevated after a drone struck an Oil tanker near the Sohar anchorage off Oman, close to the strategic Strait of Hormuz. The United Kingdom Maritime Trade Operations (UKMTO) confirmed that the incident had been classified as an attack, highlighting the vulnerability of shipping routes in the Persian Gulf.

However, potential progress towards an energy ceasefire between Russia and Ukraine could limit further gains in WTI prices. President Trump announced that both countries had agreed to halt attacks on each other's energy infrastructure, following discussions with Russian President Vladimir Putin.

Ukrainian President Volodymyr Zelenskyy initially indicated that he was unaware of any formal agreement between Moscow and Kyiv. However, he subsequently expressed Ukraine's readiness to sign ceasefire guarantees, while calling on Washington to ensure that Russia respects the proposed agreement.

In parallel, Trump announced an agreement under which Russia would supply diesel to the United States in several stages, beginning with more than 300,000 tons immediately, followed by additional deliveries in the coming months. The prospect of increased Russian energy supplies could help ease market concerns over global fuel availability.

On the demand side, the Organization of the Petroleum Exporting Countries (OPEC) significantly lowered its forecast for global Oil demand growth this year. Secretary General Haitham Al Ghais indicated on Monday that the organization now expects demand to increase by just 400,000 barrels per day (bpd), compared with an initial projection of 1.4 million bpd at the beginning of the year.

Nevertheless, OPEC anticipates that some of this deferred demand will materialize in 2027, potentially supporting Oil consumption next year.

Meanwhile, the US Department of Energy has approved an emergency exchange of up to 4 million barrels of crude Oil from strategic reserves to mitigate supply disruptions caused by Hurricane Isaias.

Looking ahead, investors will monitor the American Petroleum Institute (API) weekly crude Oil inventories report, scheduled for Tuesday.

WTI technical analysis

In the one-hour chart, WTI US Oil trades at $92.03, maintaining a bullish near-term bias as it holds comfortably above both the 100-period simple moving average (SMA) at $89.66 and the 200-period SMA at $89.65, which together underpin the advance. The Relative Strength Index (14) near 64 suggests firm but not yet overbought upside momentum, keeping the focus on buyers while price consolidates just under nearby resistance.

On the topside, immediate resistance is located at the horizontal level of $92.40, where a clear break would open the way to further gains. On the downside, initial support emerges from the clustered 100- and 200-period SMAs around $89.65, with the previously broken trend resistance line near $88.70 now acting as a deeper support zone if a corrective pullback develops.

(The technical analysis of this story was written with the help of an AI tool. Know more.)