West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $84.90 during early European trading hours on Wednesday, buoyed by escalating tensions in the Middle East that have raised fears of further disruptions to global oil supplies and international trade [1]. The price increase is primarily driven by halted shipping traffic through the critical Strait of Hormuz, as well as Yemen’s Houthis closing the Bab el-Mandeb strait to Saudi-linked shipping in retaliation for the kingdom’s blockade on Yemen and a recent attack on Sanaa’s airport [1]. Bab el-Mandeb is a vital chokepoint, with approximately 12% of global trade passing through its narrows [1].
Market participants are awaiting the US Energy Information Administration (EIA) weekly crude oil report, scheduled for later on Wednesday. The report’s outcome could further influence WTI prices: a larger-than-expected crude oil inventory draw would indicate stronger demand and potentially lift prices, while a bigger build could signal weaker demand or excess supply, undermining the price [1].
From a technical perspective, WTI’s near-term bias remains bearish as the price is capped below the 100-day Simple Moving Average (SMA), with resistance at the upper Bollinger Band near $85.95 and the 100-day SMA at $88.05. The Relative Strength Index (RSI) at 64.01 reflects firm but stretched bullish momentum, suggesting that while buying pressure persists, upside is vulnerable to rejection against the overhead technical cluster [1]. On the downside, initial support is at the $80.00 psychological level, followed by $77.90 and $74.70, with deeper support at $63.45 where dip-buying interest may emerge [1].
CONCLUSION
WTI crude oil prices are rising due to heightened geopolitical risks and supply disruptions in key Middle Eastern shipping routes. However, technical resistance and the upcoming EIA inventory report could limit further gains. Market sentiment is cautiously bullish, but upside remains vulnerable to reversal if supply concerns ease or inventory data disappoints.