WTI crude climbs to a four-month peak amid supply worries

WTI crude extended its gains on Wednesday, building on Tuesday’s 2.9% rally to reach a four-month high near $63.50.

The advance was driven by a softer U.S. dollar, disruptions to U.S. crude production caused by a severe winter storm, and supply outages in Kazakhstan following a Ukrainian drone attack. Markets are also closely watching developments in the Middle East after renewed U.S. threats toward Iran.

In a worst-case escalation scenario, concerns persist that Iran could attempt to close the Strait of Hormuz, potentially triggering a sharp spike in oil prices due to panic-driven market reactions.

Technically, the rally cleared key resistance levels at $62.18 (200-day moving average) and $62.69 (50% retracement of the $70.50/$54.87 decline). A sustained close above these levels would confirm a bullish signal and pave the way toward the next major resistance at $64.53, the 61.8% Fibonacci retracement.

That said, bulls may pause for consolidation as the stochastic oscillator is in overbought territory and upside momentum shows early signs of easing.

The former 200-day moving average has now turned into solid support, although a deeper pullback cannot be ruled out. The $61.02/$60.84 zone (rising daily Tenkan-sen and broken 38.2% Fibonacci level) is expected to contain dips and keep the bullish structure intact.

WTI’s nearly 10% gain in January has produced a strong bullish monthly candle, contributing to the early formation of a potential reversal pattern on the longer-term chart.

Res: 63.50; 64.00; 64.53; 65.00
Sup: 62.18; 61.45; 61.02; 60.84