West Texas Intermediate (WTI) crude oil prices rose slightly to around $73.00 a barrel during early Asian trading on Thursday. Escalating geopolitical tensions are contributing to market uncertainty and supporting crude oil prices as markets react to the potential for an escalation in the conflict. Tensions escalated further after reports that former President Trump secretly approved plans to attack Iran.
The Wall Street Journal reported that Trump conditionally approved the strikes, pending Iran’s response to its nuclear program. Iran has rejected the US demands, raising fears of direct US involvement in the Israeli-Iranian conflict. These tensions are increasing risks to the Middle East’s energy infrastructure and increasing pressure on oil prices.
Despite escalating geopolitical tensions, US crude oil inventories recorded their largest weekly decline in a year. The chart below shows that the US Energy Information Administration reported a decline of 11.473 million barrels, far exceeding expectations. However, the increase may be limited, as the International Energy Agency lowered its global demand forecast and raised its supply estimate in its latest report.
WTI Crude Oil Daily Chart – Price Rise
The daily chart of West Texas Intermediate crude oil shows that the price has risen above $66 in response to the conflict between Iran and Israel. The price has crossed the 200-day simple moving average and is showing significant volatility after breaking above it. This volatility suggests that the price may soon break above the dotted red trend line. This breakout could trigger a strong move towards the $80-$84 area. The four-hour chart of West Texas Intermediate crude oil shows an expanding falling wedge pattern.
The four-hour chart of West Texas Intermediate crude oil indicates that the price has broken through an expanding falling wedge pattern and reached its target, located near the $75 area. The price is now consolidating below the $75 level, showing signs of building further positive momentum.
A break above $75 could push the price toward $80, while a break above $80 could send the price toward $84. The threat of supply disruptions in the Middle East has fueled this strong upward momentum, supporting the continued positive outlook for WTI crude.
