The WTI crude oil price will be in the spotlight on Monday as market participants react to the new developments in the Middle East, where the US and Israel launched attacks on Iran. It jumped to a high of $67.78, its highest level since August last year, and was up by over 23% from its lowest level in December.
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WTI Crude Oil Price to React to Middle East Tensions
Crude oil prices have been in a strong uptrend in the past few months, a trend that may continue when the markets open on Monday. The recent rally was because of the concerns that the US would use its large armada in the Middle East to attack Iran.
This attack happened on Saturday, with Iran and the US coordinating the process. Over 200 Iranians were declared dead, a number that may continue rising in the coming days if the war escalates. At the same time, Iran retaliated by launching attacks on US military bases in the region and Israel.
Most notably, oil tankers have started avoiding the Strait of Hormuz, a major passage where over 20% of all the world’s oil passes through. Historically, crude oil prices often jump whenever there are major oil supply issues at the Strait of Hormuz.
Crude oil prices will react to the latest developments in the region. Signs of escalation, especially after the killing of Supreme Leader Ayatollah Ali Khamenei, will lead to higher prices in the near term. Analysts predict that prices may soar to over $100 a barrel. On the other hand, signs of de-escalation could lead to a sharp reversal.
Crude Oil Prices Technical Analysis
The weekly timeframe chart shows that the WTI crude oil price has rebounded in the past few weeks. This rebound started after it formed a double-bottom pattern at $55.15. A double-bottom is one of the most common bullish reversal signs in technical analysis.
WTI has moved above the 50-week and 100-week Exponential Moving Averages (EMA). At the same time, the Average Directional Index (ADX) has jumped to a high of 17, its highest level since August last year, a sign that the uptrend is gaining momentum. Also, the Relative Strength Index (RSI) has moved to 55, its highest level since 2024.
Therefore, the most likely scenario is where the price continues rising now that the war in Iran is escalated. The price may soar to over $80 when the market opens on Monday.
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