Crude Oil Rally Fades Amid Ongoing Disruptions

The recent rally in crude oil prices has lost momentum as markets adapt to ongoing disruptions and supply risks. The price of WTI Crude Oil broke above $100 due to escalating Middle East supply risks, including attacks on tankers and Saudi energy infrastructure, as well as reduced OPEC output.

While physical markets remain tight, a prolonged disruption has already been priced in, making the near-term risk/reward less favorable for oil bulls. However, geopolitical tensions could quickly revive the rally with another supply shock.

The daily chart shows a strong rally into Thursday's high before bearish volatility kicked in beneath the 105.21 resistance level. The shooting star candle and overbought RSI add to concerns of an overextended market.