Key Moments
- WTI trades near $91.75, down over 0.70%, after ending a three-day advance to a two-week high.
- Escalating tensions involving Yemen’s Houthi group, Saudi Arabia, Iran, Russia, and Ukraine help maintain a geopolitical risk premium.
- Prices hold above the 200-day SMA at $82.75 and the 38.2% Fibonacci level at $91.27, preserving an overall bullish technical backdrop.
Geopolitical Backdrop Supports WTI Despite Pullback
West Texas Intermediate (WTI), the benchmark U.S. crude oil contract, came under renewed selling pressure during the Asian session on Tuesday, halting a three-session rally that had driven prices to a two-week peak the previous day. The contract was last seen trading around $91.75, representing a loss of more than 0.70% on the day. However, downside traction appears limited as markets continue to factor in heightened geopolitical risks in the Middle East and beyond.
The Iran-backed Houthi movement in Yemen intensified its actions against Saudi Arabia, launching additional missile attacks on Monday. These followed deadly strikes on Riyadh’s King Khalid International Airport over the weekend, which prompted a Saudi pledge to retaliate. In parallel, U.S. President Donald Trump raised the prospect of participating in strikes against the Houthi group and resuming attacks on Iran.
On a separate front, Ukrainian President Volodymyr Zelenskyy accused Russia of breaching an “energy ceasefire” that had been announced by U.S. President Donald Trump. Collectively, these developments help sustain a geopolitical risk premium in energy markets and are seen as a supportive factor for crude prices, encouraging caution among bearish participants looking to call an end to the recent rebound from an over one-month low.
Technical Landscape: Bullish Bias Intact Above Key Support
From a technical standpoint, WTI remains above the 200-day Simple Moving Average (SMA), which comes in at $82.75, a level that continues to underpin a constructive, bullish bias even as prices retreat from recent highs. The contract is also trading just above the 38.2% Fibonacci retracement level at $91.27, indicating an initial demand zone in the current price neighborhood and suggesting that dip-buying interest may emerge on pullbacks.
Momentum indicators on the daily chart present a mixed picture. The Moving Average Convergence Divergence (MACD) indicator is positioned slightly below the zero line, pointing to waning upside momentum. At the same time, the Relative Strength Index (RSI) is hovering near 52, which signals a neutral-to-positive configuration and implies that buying pressure is still present but no longer stretched. As a result, a clear move below the 38.2% Fibonacci retracement would be needed to bolster expectations for a more sustained downside phase.
Key Technical Levels
Below current levels, traders are watching a series of deeper Fibonacci supports and prior lows that could act as structural demand zones. On the upside, a break of near-term resistance would be required to re-energize the bullish trend.
| Type | Level | Comment |
|---|---|---|
| Immediate price area | $91.75 | Current trading region, modest losses on the day |
| 38.2% Fibonacci retracement | $91.27 | Initial demand zone; weakness below would signal scope for further downside |
| 200-day Simple Moving Average | $82.75 | Major trend support underpinning the broader bullish bias |
| Deeper Fibonacci support | $87.85 | Subsequent lower support area |
| Deeper Fibonacci support | $84.43 | Additional lower Fibonacci floor |
| 78.6% Fibonacci retracement | $79.57 | More distant technical support |
| Prior cycle low | $73.37 | Key structural demand zone from the previous down cycle |
| 23.6% Fibonacci retracement | $95.49 | Initial resistance; break higher would open the way for further gains |
| Cycle high area | $102.33 | Upside target zone that may cap advances without stronger momentum |
On the topside, a sustained move through the 23.6% Fibonacci retracement at $95.49 would reestablish upward momentum and expose the cycle high region near $102.33. That zone is expected to act as a significant barrier to further gains unless underlying momentum improves more convincingly.
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