- WTI struggles to capitalize on a three-day uptrend, though the downside seems limited.
- The geopolitical risk premium remains in play, limiting the downside for the black liquid.
- The bullish technical setup backs the case for the emergence of dip-buyers at lower levels.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts fresh sellers during the Asian session on Tuesday, snapping a three-day winning streak to a two-week high, touched the previous day. The black liquid currently trades around the $91.75 region, down over 0.70% for the day, though the downside seems cushioned amid escalating Middle East conflicts.
The Iran-backed Houthi group in Yemen escalated its campaign against Saudi Arabia and fired more missiles on Monday. This follows deadly strikes on Riyadh’s King Khalid International Airport over the weekend, which drew a Saudi vow of retaliation. Moreover, US President Donald Trump raised the possibility of joining strikes on the Houthi group and resuming attacks on Iran.
Meanwhile, Ukrainian President Volodymyr Zelenskyy accused Russia of violating an “energy ceasefire” announced by U.S. President Donald Trump. This keeps the geopolitical risk premium in play and should act as a tailwind for crude oil prices, warranting caution for bearish traders before confirming that the recent bounce from an over one-month low has run out of steam.
From a technical perspective, oil prices hold comfortably above the 200-day Simple Moving Average (SMA) at $82.75, retaining a constructive bullish bias despite the latest pullback. Moreover, the black liquid sits just over the 38.2% Fibonacci retracement at $91.27, suggesting an initial demand zone around the current area amid mixed momentum indicators on the daily chart.
The Moving Average Convergence Divergence (MACD) remains slightly below zero and hints at fading upside momentum, while the Relative Strength Index (RSI) near 52 reinforces a neutral-to-positive tone, indicating that bullish pressure persists but is no longer overstretched. Hence, weakness below the 38.2% Fibo. is needed to back the case for a further depreciating move.
This is followed by deeper Fibonacci floors at $87.85 and $84.43, with the 78.6% level at $79.57 and the prior cycle low at $73.37 marking more distant structural demand. On the topside, a break above the 23.6% Fibo. retracement at $95.49 would reopen the path toward the cycle high area near $102.33, which is likely to cap gains unless momentum meaningfully improves.
