WTI eases from three-month top and slips below $92.00; supply concerns to limit downside
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – touches a fresh three-month top, around the $92.50 area during the Asian session on Wednesday, though it lacks follow-through. Nevertheless, the commodity seems poised to climb further amid escalating US-Iran tensions.
WTI crude oil prices declined from a recent three-month high, trading below $92.00 amid supply concerns. Tensions between the US and Iran are driving the market higher, with the US attacking Iranian oil tankers in the Gulf of Oman and Iran responding with missile strikes against US forces. Iran's Islamic Revolutionary Guard Corps (IRGC) warned that ships in Kuwaiti and Bahraini ports hosting US forces could be targeted.
This geopolitical risk premium supports the positive outlook for crude oil prices. However, shipping traffic through the Strait of Hormuz has been affected by the ongoing conflicts. Iran has threatened to fully blockade the strategic waterway in response to economic sanctions, further raising fears of disruptions to oil supplies.
While technical analysis indicates a near-term positive outlook for WTI, traders are waiting for US inflation figures to gain further clarity on the Federal Reserve's policy stance. WTI remains above the 200-day Simple Moving Average and is approaching key Fibonacci retracement levels. On the downside, support levels are found at the 50% retracement and 38.2% levels, with a deeper pullback to the 200-day SMA and 23.6% retracement if prices continue to decline.
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