West Texas Intermediate (WTI), the US crude oil benchmark, traded around $88.45 during early European hours on Monday, attracting buyers after reports from the Kuwaiti military of missile and drone attacks on the country [1]. According to The Guardian, Kuwait's armed forces stated that their air defense systems were intercepting hostile missiles and drones, with air raid sirens and emergency alerts issued nationwide [1]. Shortly after Kuwait reported the attacks, US Central Command (Centcom) announced it had conducted strikes on Iranian radar and command and control sites for drones over the weekend [1].
In related developments, Iran’s Islamic Revolutionary Guards Corps (IRGC) claimed responsibility for targeting an airbase used by the US to launch an attack on Sirik Island in southern Iran [1]. These escalating tensions in the Middle East have heightened fears of supply disruptions, which could further support WTI prices in the near term [1].
Market participants are also awaiting the release of the American Petroleum Institute (API) report later on Tuesday. A larger-than-expected crude oil inventory draw would indicate stronger demand and could lift WTI prices, while a bigger build than estimated would signal weaker demand or excess supply, potentially weighing on prices [1].
From a technical perspective, WTI maintains a constructive near-term tone as long as it stays above the 100-day simple moving average (SMA) at $82.56, with immediate support around the lower Bollinger Band at $85.20 [1]. Resistance levels are noted at the May 26 high of $93.57, the Bollinger middle band near $95.00, and the psychological $100.00 level [1]. The Relative Strength Index (RSI) at 42 suggests cooling momentum but not outright bearish pressure [1].
CONCLUSION
WTI oil prices have risen amid escalating Middle East tensions following reported missile and drone attacks on Kuwait and subsequent US strikes on Iranian sites. The market is closely watching for further developments and the upcoming API inventory report, both of which could significantly influence oil prices in the near term.