WTI Crude Oil News: USOIL Rises to $70.77 as Israel Keeps Iranian Strikes Open

Crude oil prices climbed on Wednesday following news that Israel has not ruled out the possibility of striking Iranian energy infrastructure, despite earlier assurances to the U.S. that these sites would be spared.

West Texas Intermediate (WTI) rose slightly to $70.77 per barrel, after having dropped more than 4% the day before. Brent crude also saw gains, rising above $74 per barrel.

These movements follow Israeli Prime Minister Benjamin Netanyahu’s assertion that Israel reserves the right to take any actions it deems necessary in response to Iran’s recent missile strikes.

The U.S. has been working to ease Israeli concerns about potential Iranian retaliation by deploying additional defense systems to the region.

The Pentagon recently confirmed the deployment of a Terminal High Altitude Area Defense (THAAD) battery and 100 soldiers to bolster Israel’s air defenses.

However, U.S. officials, speaking anonymously, emphasized that Israel’s assurances regarding the avoidance of Iranian oil and nuclear sites are not guaranteed and could change depending on shifting circumstances.

U.S.-Israel Diplomacy and Energy Market Reaction

The assurances given by Israel to avoid targeting Iranian oil sites initially provided some relief to global energy markets, contributing to Tuesday’s significant decline in crude prices.

The Biden administration’s diplomatic efforts appear to be aimed at preventing further disruptions to the global oil supply chain, which has already been strained by geopolitical conflicts and production adjustments from OPEC.

Yet, Netanyahu’s remarks about keeping all options open have reintroduced uncertainty into the energy markets. Investors are now cautious about the possibility of supply chain disruptions, especially if tensions between Israel and Iran escalate further.

OPEC and IEA Demand Forecasts Add Pressure

Adding to the downward pressure on oil prices earlier this week was the Organization of the Petroleum Exporting Countries (OPEC) announcement cutting its global demand growth forecast for 2024.

OPEC reduced China’s demand forecast to 580,000 barrels per day (bpd), citing ongoing economic challenges and the country’s gradual shift toward cleaner energy sources.

The International Energy Agency (IEA) also issued a forecast pointing to a global oil surplus in 2024, with demand growth expected to slow to 900,000 bpd.

These revisions have weighed heavily on crude oil prices, reflecting expectations of oversupply in the market.

WTI Crude Oil chart showing bearish momentum at $70.77 amid Israel-Iran tensions

Technical Outlook for WTI Crude Oil

WTI Crude Oil is currently trading at $70.77, with the 4-hour chart signaling a bearish outlook. The price has broken below its 50-period Exponential Moving Average (EMA), which is now acting as dynamic resistance at $72.88.

Key support sits at $69.81, and if breached, further declines to $68.14 and $66.40 could be expected.

Key Price Levels:

  • Pivot Point: $71.51

  • Immediate Resistance: $72.88

  • Next Resistance: $73.39

  • Next Resistance: $74.83

  • Immediate Support: $69.81

  • Next Support: $68.14

  • Next Support: $66.40

Technical Indicators:

  • RSI: The Relative Strength Index (RSI) is currently at 39.44, indicating bearish momentum, but still above oversold territory. This suggests potential for further downside before a reversal.

  • 50 EMA (50-Day Exponential Moving Average): At $72.88, this EMA is providing dynamic resistance, and prices remain bearish as long as they stay below this level.

Conclusion: WTI Crude Oil faces continued bearish pressure, with immediate resistance at $72.88 and a downside risk if support at $69.81 is breached.

Traders should monitor the RSI for oversold conditions, which could signal a potential rebound. However, the broader outlook remains bearish as long as prices stay below the 50 EMA.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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