Key Moments
- WTI retreats after reaching a new high since May 19 near $104.00, but holds above $102.00 and remains higher for a third consecutive session.
- Geopolitical tensions and supply disruption concerns offset optimism around Middle East diplomacy, helping sustain a risk premium in crude prices.
- Technical indicators on the 4-hour chart continue to point to a constructive bullish setup, with key support near $100.49 and major resistance around $107.22.
Price Action and Market Context
West Texas Intermediate (WTI), the benchmark US Crude Oil contract, is paring gains after touching a new high since May 19 around the $104.00 level during Friday’s Asian session. The pullback has been modest so far, with the contract still trading above the $102.00 handle and on track for a third straight daily advance, as supply risk concerns counterbalance more hopeful signals on Middle East diplomacy.
Market participants are weighing prospects for renewed diplomatic efforts in the region against ongoing geopolitical tensions that threaten to disrupt oil flows, keeping a supportive risk premium embedded in crude prices.
Geopolitical Developments and Supply Risk
Recent political initiatives have introduced some optimism on the diplomatic front. According to the latest developments, US Vice President JD Vance sent a direct letter to Mohsen Rezaei, the secretary of Iran’s Supreme National Security Council, urging a restart of peace negotiations. In addition, Qatar has presented Iran with a new draft agreement aimed at ending the conflict with the US and Israel.
At the same time, supply-side risks remain elevated. Iran’s navy stated on Thursday that four oil tankers had hit sea mines in the Strait of Hormuz. Alongside this, investors remain cautious amid intensifying hostilities between the Iran-backed Houthis in Yemen and Saudi Arabia. These factors are helping to maintain the geopolitical risk premium and continue to function as a supportive force for crude prices.
Technical Outlook: Bullish Structure and Key Levels
From a chart-based perspective, WTI maintains a constructive tone after breaking above the 100-period Simple Moving Average (SMA) on the 4-hour time frame. The latest advance has been unfolding within an upward-sloping parallel channel, reinforcing the bullish view in combination with supportive momentum readings.
The Relative Strength Index (14) is positioned around 57, while the Moving Average Convergence Divergence (MACD) indicator has shifted into slightly positive territory. Taken together, these signals indicate that buyers continue to hold the upper hand in the short term, with the lower boundary of the rising channel near $100.49 acting as a key area of underlying demand.
| Technical Indicator / Level | Value / Description |
|---|---|
| Recent high (since May 19) | Approximately $104.00 |
| Current trading zone | Above $102.00 |
| Channel support (lower boundary) | $100.49 |
| Key topside resistance (upper channel boundary) | Near $107.22 |
| 100-period SMA (4-hour chart) | Recently broken to the upside |
| 100-period EMA (4-hour chart) | $96.97 |
| Relative Strength Index (14) | Around 57 |
| MACD | Turned slightly positive |
On the upside, the primary resistance is located at the upper edge of the ascending channel, close to $107.22. A failure to clear this zone could prompt a period of consolidation or a more pronounced corrective pullback.
On the downside, a decisive move below the channel support would mark a more substantial weakening of the prevailing bullish configuration and could open the door to a test of the 100-period Exponential Moving Average (EMA) at $96.97.
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