USOIL Price Surges 5–7% to $88–$90.50 as Renewed US-Iran Tensions Reignite Supply Fears

Quick overview

USOIL (WTI crude oil futures) really took off today, jumping up by 5–7% right out of the gate and then carrying that momentum through the session . This pretty aggressive rebound comes on the heels of a beatdown on Friday, which was driven by the ongoing US-Iran conflict escalating even further.

Key Drivers Today

So Iran basically did a 180 on their announcement from Friday that the Strait of Hormuz was open to commercial traffic, claiming it’s closed again because the US refused to give them a break by lifting the naval blockade on Iran’s ports. We’re also seeing some pretty intense reports coming out – like the Iranian Revolutionary Guard firing at a tanker, and a container ship getting hit with a projectile, plus the US Navy just intercepted an Iranian-flagged cargo ship in the Gulf of Oman, which is a first since the blockade started.

President Trump threw some more fuel on the fire by saying its pretty unlikely that the ceasefire (which expires around April 22) is gonna get extended – that just adds to the uncertainty. The strait is still up in the air, because it handles about 20% of all seaborne oil – that’s just a huge deal and it’s keeping prices artificially high.

But even though US domestic supply is actually looking pretty good with all those recent inventory builds, that’s just getting pushed to the side by all the hype and uncertainty.

WTI Crude Oil Technical Analysis

WTI crude is at $86.82 on the 4-hour chart after breaking below that key $91.30 support zone, which has been holding up pretty well for a while – it was right on top of that 200-period moving average. That breakdown is a pretty clear sign that the whole trend is shifting from consolidation to bearish continuation – and it doesn’t help that the downward trendline from $110 is still in place.

If you look at the recent candlesticks, you can see a sharp plummet down to $81.67, followed by some pretty small candles – that’s not a whole lot of conviction, if you know what I mean. The 50-period moving average at $92.17 is now acting as a pretty solid ceiling for any recovery attempts.

Key Levels:

• Resistance: $90.50 up to $95.30
• Support: $86.00 to $81.70 to $76.78

Trade Idea: Sell below $90.50, looking to target $81.70, but only if they go above $95.30 do we get out of it.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

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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