What Happened
WTI crude oil is trading around $87.50 per barrel, holding near recent highs after the U.S. Energy Information Administration (EIA) flagged that global oil inventories are declining faster than previously forecast. The catalyst is the ongoing Iran conflict, which is disrupting supply expectations and keeping a floor under prices. WTI has gained approximately 3.2% over the past five sessions as the geopolitical risk premium builds.
Key Levels
- Support 1: $85.00 โ a psychologically significant round number and recent consolidation zone
- Support 2: $82.40 โ the 50-day moving average, which capped the previous pullback in late September
- Resistance 1: $89.00 โ a prior swing high from early October that sellers defended firmly
- Resistance 2: $91.50 โ the 2024 year-to-date high, a major technical ceiling
Technical Picture
WTI is in a short-term uptrend, trading above both its 50-day ($82.40) and 200-day ($79.80) moving averages โ a bullish structural setup. The RSI sits around 62, which signals momentum is building but has not yet reached overbought territory (above 70), leaving room for further upside. The price action shows higher lows forming since the $80.00 low in early September, confirming buying pressure.
What Traders Are Watching
The key trigger level to the upside is a clean break and daily close above $89.00. If that holds, momentum traders will likely target the $91.50 year-to-date high. On the downside, a break below $85.00 would signal the geopolitical risk premium is fading and could open a move back toward the 50-day MA at $82.40. Traders should also watch Wednesday’s official EIA inventory report for confirmation of the drawdown pace.
Bias
Bullish. The combination of faster-than-expected inventory declines, active geopolitical risk from the Iran conflict, and a price structure sitting above key moving averages favours the upside. The path of least resistance remains higher while $85.00 holds as support.
Note: Prices are indicative. Always manage risk with appropriate position sizing.
Source: U.S. Energy Information Administration (EIA) โ eia.gov