WTI Crude Oil Prices Slide on Failed Recovery Attempt
The price of WTI crude oil has come under pressure again after a failed attempt to recover towards $100-$101 per barrel on September 25. The rebound from the $92-$93 area stalled, with the price reversing from its long-term moving average and falling below faster averages.
The Middle East remains the main source of volatility in the oil market, but the reaction to potential de-escalation has shifted from supply disruptions to every sign of possible de-escalation. Prices have fallen sharply on reports of progress in U.S.-Iran contacts and the possibility of restoring freer shipping through the Strait of Hormuz.
Saudi Arabia is working to bring the East-West Pipeline back into operation, increasing alternative export flows that reduces fears of an immediate shortage. However, a risk premium has not disappeared completely, with new attacks on energy infrastructure and continued problems with routes through the Red Sea potentially bringing buyers back into the market.