The WTI crude oil price continued its strong uptrend last week and closed at $112 as the crisis in the Middle East accelerated. USOIL has now jumped by over 104% from its lowest level this year.
Trump’s Ultimatum Deadline to Iran Nears
The WTI crude oil price continued rising and flipped that of Brent, the global benchmark for the first time in years. This rally continued after President Donald Trump delivered a speech justifying his attack and highlighting his plans.
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The main risk this week is that Trump's ultimatum to Iran expires on Monday, opening a new front to the war. Trump has given Iran until Monday to reach a deal with the United States and reopen the Strait of Hormuz or risk total annihilation.
Trump has also signaled that he may launch a ground attack, potentially to Kharg Island or to attempt to take the enriched uranium.
Iran, on the other hand, has remained adamant and warned that it will cause havoc in the Middle East by bombing key infrastructure in the region. Such a move will likely lead to higher crude oil prices as the disruption continues.
On the positive side, more ships are crossing the Strait of Hormuz. These include ships of friendly countries like China and India. France, which has blocked the US from using its airspace, was also allowed to pass.
Another positive is that the crisis will likely need to escalate before it de-escalates as Trump’s deadline nears. In his statement last week, he said that the war will last for another two or three weeks. He may want to end the war before his trip to China in May.
WTI Crude Oil Price Technical Analysis
The weekly timeframe chart shows that the WTI crude oil formed a double-bottom pattern at $55.15 and a neckline at $77.52. It has moved above the neckline and the descending trendline, which connects the highest swings since September 2023.
Crude oil has moved to the extreme overshoot level of the Murrey Math Lines tool. It is also nearing the golden cross pattern as the 50-week and 200-week Exponential Moving Averages (EMA) near their crossover. A golden cross is one of the most common bullish patterns in technical analysis.
The Relative Strength Index (RSI) has moved to the extreme overbought level of 86, while the two lines of the Percentage Price Oscillator (PPO) have continued rising.
Therefore, the price will likely continue rising as bulls target the next key resistance level at $120. A drop below the key support level at $100 will invalidate the bullish outlook.
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