WTI Oil Prices Recover from Three-Week Low but Cap Below $89.00
WTI oil prices have recovered from their three-week low, but the recovery is capped below $89.00. The price of West Texas Intermediate oil rose by around 0.80% to trade at $88.80 on Wednesday, after reversing part of the previous day's heavy losses.
The Middle East crisis continues to be a major factor influencing oil prices, with hopes for a diplomatic solution fading after US President Donald Trump rejected a seven-day ceasefire proposal from Iran. Qatari efforts to broker a breakthrough have made little progress this week, and US officials believe that Trump could order a return to major combat after the midterm elections.
From a technical perspective, the overnight breakdown below the 200-period Exponential Moving Average on the 4-hour chart was seen as a key trigger for bearish traders. However, momentum indicators remain soft, with the Relative Strength Index lingering just above the oversold band and the Moving Average Convergence Divergence in negative territory.