WTI falls below $93.50 on profit-taking, continued US-Iran tensions in focus

West Texas Intermediate (WTI), the US crude oil benchmark, is trading at around $93.20 at the beginning of European trading hours on Thursday. The price fall is attributed to traders taking profits. However, a potential downward trend may be constrained by heightened tensions between the US and Iran, as well as the increasing attacks on tankers in the Persian Gulf.

Traders are anticipating the release of the US Energy Information Administration's (EIA) report, which is scheduled for later in the day. An Iranian senior official stated on Wednesday that Iran is prepared for a more intense conflict and will respond with counterstrikes if the US continues its attacks on its territory and infrastructure.

US Secretary of State Marco Rubio mentioned earlier in the week that Iran continues to attempt to hit US naval ships, and for every such attempt or success, more tankers will be targeted. According to Reuters, Iran has attacked 10 ships near the Strait of Hormuz following the US sinking of five Iranian oil tankers, marking the largest wave of attacks by both sides since the six-month conflict began.

Concerns over Middle East oil flow could potentially drive up the WTI price in the near future. ING commodity analysts warn that the risk lies in escalating tensions leading to significant disruptions in the Strait of Hormuz flows. Oil flows have been unexpectedly high in recent weeks, but the market could experience a sharper tightening if the ongoing escalation results in further oil flow disruptions.

According to the American Petroleum Institute (API), US crude oil inventories for the week ending September 4 decreased by 300,000 barrels, slightly below the projected 2.6 million barrels. The market expectation was for a reduction of 1.3 million barrels. TD Securities analysts note that crude prices continue rising due to persistent geopolitical risks and the absence of reconciliation, leading to a sustained tightening of oil fundamentals and supporting the upward price pressure.

The near-term bias for WTI US Oil remains bullish, as the daily chart shows the price holding above the Bollinger simple moving average (SMA) mid-line and the 100-day moving average, indicating that the recent uptrend is still supported despite the latest pullback. The Relative Strength Index (RSI) at 66.6 is just below the overbought level, implying that the upside momentum is still favorable but may face periods of consolidation.

On the upside, the immediate resistance level is at the upper Bollinger band around $94.60, which, if broken, could enable further gains toward higher psychological levels. On the downside, initial support is at the Bollinger mid-line around $86.60, followed by the 100-day moving average at $85.25. A substantial correction below the lower Bollinger band near $78.65 would be required to challenge the overall bullish structure.