WTI Crude Oil Slips to $66.50 but Downside Limited Amid Rising Middle East Tensions

WTI Crude Oil Drops to $66.50, But Downside Risks Capped Amid Geopolitical Tensions

West Texas Intermediate (WTI) crude oil prices fell to approximately $66.50 per barrel on Thursday in early European trading, pulling back from a two-month high of $67.82. Despite the intraday decline, crude prices remain underpinned by growing geopolitical risks and supply disruption concerns, particularly stemming from escalating Israel-Iran tensions.

Middle East Developments Add Risk Premium

According to CBS News, US officials have been informed that Israel is prepared to initiate a military operation into Iran, significantly raising the stakes in the region. As per a Reuters report, the US is also reducing its troop presence in the Middle East, hinting at a strategic pivot in response to regional volatility.

This geopolitical backdrop may create upward pressure on crude prices, as markets factor in the possibility of supply shocks from key oil-producing zones.

Demand-Side Support from Trade Optimism

Beyond geopolitics, US-China trade relations are showing signs of thawing, which may bolster global energy demand. Easing trade tensions could act as a supportive factor for oil prices, particularly if industrial activity and logistics improve.

Technical Outlook for WTI Oil

• Immediate Support: $66.00 psychological zone
• Resistance: $67.82 (two-month high)
• A sustained break above $67.80 could trigger a test of the $69.00 level.
• If tensions ease or supply concerns fade, WTI could revisit $65.40 as the next support.

Related Tredu Reads:

• How Middle East Tensions Impact Oil Prices
• Crude Oil Technical Analysis: WTI and Brent Forecast
• Global Energy Demand Outlook 2025