WTI Tests a Two-Week High Above 63.00 as Trump “Hopes” US Can Avoid War with Iran

Matt Weller
By :  ,  Head of Market Research

Oil prices have generally tracked risk appetite so far this week, dropping sharply on Monday before recovering over the last three days. Today’s rally has been supercharged by escalating geopolitical tensions in the Middle East; when asked whether the US would go to war with Iran, the President stated “I hope not.” The latest comments come on the heels of last week’s news that the White House was positioning aircraft carriers in the region and has drawn up plans to deploy more than 100k US troops to the Middle East if necessary.

From a fundamental perspective, oil prices are delicately balanced between competing forces: geopolitical risks in Iran and Venezuela are boosting prices on concerns of a supply shock, while the ongoing US-China trade tensions and potential for OPEC to increase production are keeping bulls on their toes.

Technically speaking, US oil prices peeked out to a two-week high above 63.00 this morning before pulling back as of writing. So far, WTI has only seen a shallow 23.6% Fibonacci retracement of its 2019 rally, suggesting that the medium-term momentum remains with the bulls for now:

Source: TradingView, FOREX.com

Moving forward, a daily close above roughly 63.50 would open the door for a continuation toward the year-to-date high near 66.60. Meanwhile, a close below support in the 60.75 region would pave the way for a drop toward the 38.2% Fibonacci level in the mid-57.00s.

With geopolitical tensions running high on multiple fronts and two OPEC meetings scheduled for June, traders should keep a close eye on oil markets in the coming weeks.

Related tags: Crude Oil OPEC

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