The WTI crude oil price continued its strong rally last week as the impact of the ongoing war in Iran continues. It surged to a multi-year high of $92.66 on Friday, up by 67% from its lowest level this year.
WTI Crude Oil Price Rally Continues
There is a possibility that the WTI crude oil price will continue rising this week as some key countries reduce their output. Indeed, perpetual futures on Polymarket shows that WTI jumped to $115 on Sunday.
The main driver for the ongoing crude oil price surge is that war against Iran that started last week. Iran, the United States, and Israel have all vowed to continue the fight, and on Saturday, a major Iranian refinery was hit.
At the same time, Kuwait and the United Arab Emirates announced that they were reducing their supply as the war continued and traffic in the Strait of Hormuz falls. There are signs that oil shippers have not taken Donald Trump’s offer, where the US would offer escort services and insurance.
Kuwait and the United Arab Emirates joined other top oil producers that have paused their output or slowed it. The other notable ones are countries like Saudi Arabia, Iraq, and Qatar.
There are rising odds that the war in the Middle East will continue in the foreseeable future as odds of a ceasefire happening soon have fallen on Polymarket and other prediction marketplaces. Without a ceasefire, there is a possibility that supply constraints will remain even if President Trump taps the Strategic Oil Reserves.
In addition to the ongoing war in Iran, crude oil prices will react to the upcoming US oil inventory data. The last report showed that inventories rose by over 3.57 million, while gasoline stocks dropped by 1.7 million.
Crude Oil Prices Technical Analysis
The weekly chart shows that the WTI crude oil price has gone parabolic in the past few weeks, moving a low of $55.15 to $92. This rebound started after it formed a double-bottom pattern, a highly common bullish reversal sign in technical analysis.
It has already moved above the neckline at $77 and the descending trendline that connects the highest swings since September 2023.
WTI has jumped above the 50-week Exponential Moving Average (EMA) and the Strong Pivot Reverse point of the Murrey Math Lines tool at $87.5.
Therefore, the price will likely continue rising this week as the war goes on. A move to $115 as the futures are suggesting cannot be ruled out.
Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.
