The WTI crude oil price continued rising, reaching its highest level since August last year. It jumped to $67, up sharply from last December’s low of $55, as tensions between the United States and Iran have escalated.
Crude oil prices continued rising this month as geopolitical concerns rose. In a statement on Friday, President Donald Trump warned that he may launch a limited attack on Iran to force the government into a nuclear deal.
Iran, on the other hand, has warned that it would respond to any attack by launching a war in the Middle East. Its options include closing the Strait of Hormuz, a major artery through which millions of barrels of oil cross each day.
Iran may also attack oil terminals and other infrastructure in the Middle East region, a move aimed at boosting crude oil prices and punishing the US by boosting inflation.
The upcoming war in the region will likely have a major impact in the oil market because it comes at a time when supply remains elevated.
WTI crude oil price jumped after a report by the Energy Information Administration (EIA) noted that US inventories tumbled by 9 million barrels, the biggest fall since September last year.
Meanwhile, the oil market reacted mildly to the Supreme Court decision on Donald Trump’s tariffs. In a statement on Friday, the court ruled that Trump erred in using the Emergency Powers Act to impose tariffs on other countries. Trump reacted by blasting the court and by announcing a new global 10% tariff.
Crude oil price technical analysis
The daily timeframe chart shows WTI formed a double-bottom pattern at $55.28, its lowest level in April and November last year. A double-bottom is one of the most common bullish reversal signs in technical analysis.
It has formed a golden cross pattern as the 50-day and 200-day Weighted Moving Averages (WMA) crossed each other. A golden cross often leads to more gains over time.
Crude oil has remained above the Supertrend indicator. Therefore, it will likely continue rising in the coming days, with the next level to watch being the psychological level at $70.
On the other hand, a drop below the key support level at $62 will invalidate the bullish outlook and point to more downside. Such a drop will happen if the crisis in the Middle East fades.
Credit: Oilprice.com
