WTI Oil Plummets as Geopolitical Tensions Ease
WTI oil prices have declined further after falling nearly 9% yesterday following a pause in attacks between the US and Iran. Today, WTI trades around $77.90, down almost 4% on the day.
The easing of hostilities has raised hopes that security risks around the Strait of Hormuz could ease, prompting traders to unwind part of the geopolitical premium built into oil prices. However, US President Donald Trump's warning that the US would 'go back and finish the job' if no agreement was reached with Iran suggests that the risk of renewed military action remains.
From a technical perspective, WTI has failed to hold above its 100-day SMA at $88.19, which it briefly reclaimed last week. Prices have now slipped below the 50-day SMA at $81.26, indicating a bearish near-term bias. The Relative Strength Index (RSI) has slipped below the neutral 50 level after briefly entering overbought territory.
The 200-day SMA at $74.78 provides key support for WTI prices. A decisive daily close below this level could open the door to a deeper decline toward the pre-war region of $67-$65.