- WTI crude oil advances despite market sentiment taking a hit.
- US crude oil prices initially rose almost $2/barrel on the day before widespread risk aversion in the markets dampened prices.
- Geopolitical tensions in the Middle East arising from the escalation in the Gaza Strip continue to weigh on energies.
West Texas Intermediary (WTI) crude oil prices rose further on Wednesday, despite global markets registering a broad turn towards safe haven values.
Following the rocket attack on a Gaza hospital that left more than 500 civilians dead and both Israel and Hamas blaming the other side for the devastating attack, investors are once again cowering as geopolitical tensions over the Gaza conflict the Gaza Strip continue to be tense.
Tensions in the Middle East and reduced US crude supply keep barrel supplies rising
As stability in Gaza continues to deteriorate, markets increasingly fear that tensions will rise to the point that the altercation could boil over and spark political disputes between the United States and neighboring countries in the region. The nearby Strait of Hormuz, a major global energy supply choke point through which a fifth of all global crude oil shipments pass, could be negatively affected if geopolitical tensions continue to rise.
Adding to pressures on crude oil prices, US crude oil inventories posted a steeper-than-expected decline on Wednesday, with the Energy Information Administration’s (EIA) barrel count recording a decline of 4.491 million barrels for the week to October 13, much steeper than the forecast of -0.3 million barrels and significantly affecting the previous week’s build of 10.176 million barrels.
Technical outlook for WTI
WTI crude oil barrels hit a new daily high at $88.50 before returning to $87.00 as risk aversion weighs on markets, but Middle East tensions are keeping crude oil prices in the green for Wednesday.
The daily candlestick charts are struggling to break out of the 50-day moving average (SMA) currently parked near $85.13, and Wednesday’s bullish action sees WTI touching the bottom of an uptrend line from the low of end of June at $67.14.
Despite WTI’s recent decline from the 2023 highs of $93.98 reached in September, crude oil remains in a bullish position, with prices facing a bullish extension since the last turn from the $82.00 zone.
WTI Daily Chart
WTI technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
