West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $87.50 during the early European trading hours on Thursday. WTI jumps to the highest since June 11 amid rising tensions in the Middle East after a 12th straight night of strikes on Iran and with major disruption now facing two of the world’s key supply routes.
The latest strikes came after US President Donald Trump threatened to destroy an Iranian bridge or power plant every time Iran fires at a ship in the Strait of Hormuz, raising tensions around the key oil transit route.
The Islamic Revolutionary Guard Corps (IRGC) said on Thursday that no tanker will enter or leave the critical waterway without coordination with Iran. Meanwhile, the Houthis, the Iran-backed group in Yemen, on Thursday claimed an attack on two Saudi oil tankers transiting through the Red Sea, identified as ENCELA and LAYLIA, saying the vessels violated the naval blockade imposed by the group on Monday.
"This price increase is not necessarily due to a reduction in oil production, but rather because, from the market's perspective, conditions will remain volatile throughout the week, especially if Saudi oil exports to Asia or Red Sea shipping face further disruption,” said analysts at the consulting firm Gelber & Associates.
Technical Analysis:
In the daily chart, the near-term bias of WTI US Oil appears bearish as price holds just under the 100-day simple moving average (SMA), keeping the recent rebound capped beneath this trend marker. The upper Bollinger Band adds to the overhead supply, while the Bollinger middle band around far below current levels, highlights how extended the latest leg higher has become. A Relative Strength Index (14) reading near 67.5 sits close to overbought territory, suggesting upside momentum is strong but increasingly stretched against the prevailing resistance band.
On the topside, the key resistance is clustered between the upper Bollinger Band at $88.10 and the 100-day SMA at $88.15. A daily close above this zone could pave the way to the $90.00 psychological level.
On the downside, initial support is defined by the Bollinger middle band near $75.55, ahead of a deeper technical floor at the lower Bollinger Band around $63.00, where any corrective slide would likely meet stronger dip-buying interest.
Energy complex rallies as US-Iran tensions and Russia-Ukraine strikes escalate
Rabobank’s energy strategists observe that geopolitical risks have intensified, with “the escalation between the U.S. and Iran following the collapse of the interim peace deal, as well as intensifying strikes between Ukraine and Russia,” driving broad-based strength across the complex. They note that these developments “drove price rallies across crude oil, refined products, natural gas, and European power markets over the past week,” reinforcing the recent surge in benchmark crude and refined product prices highlighted in their latest outlook.
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