WTI crude oil – short-term sentiment has eased following a gap-up opening and a surge to a new multi-month high, though broader bullish momentum remains firmly in control

WTI crude oil retreated swiftly from a fresh six-month high of $77.88, reached after Monday’s gap-higher opening, indicating that traders remain relatively unconcerned about mounting risks of major supply disruptions. Despite the pullback, the broader market outlook remains firmly bullish.

Oil prices surged by nearly 5% at Monday’s open, following a U.S. airstrike on Iran over the weekend—a move that drew sharp criticism from several countries, including major powers China and Russia.

The timing of the strike was key. Israel had initiated the conflict with air raids on Iran the previous Friday, allowing markets—closed over the weekend—to avoid an immediate panic reaction. This gave traders time to absorb the news and respond more measuredly when markets reopened.

This event follows an earlier market shock caused by Trump’s Liberation Day tariff announcement, which was delivered during a trading day and triggered a sharp sell-off in equity markets.

While investors initially feared a rapid escalation of hostilities—particularly the possibility that Iran would close the Strait of Hormuz, disrupting global oil supply and potentially driving prices toward $100 per barrel—this scenario has yet to materialize.

Markets are now focused on geopolitical developments, particularly Iran’s escalating tensions with the U.S. and Israel. Of note, the Iranian parliament has already voted to close the Strait of Hormuz, pending verification. All eyes are also on diplomatic reactions, with Iran’s foreign minister meeting Russian President Vladimir Putin today, and the UN Security Council convening at Iran’s request.

From a technical standpoint, the daily chart remains bullish. Although the overnight decline weakened near-term momentum, key indicators still support the upward trend.

The $72.50 area, representing the 23.6% Fibonacci retracement of the $55.40–$77.88 rally and a recent higher base, should act as a strong support and help preserve the bullish structure. Below that, the rising 10-day moving average at $71.19 offers additional support, guarding critical levels at $70.00 and $69.29 (psychological and 38.2% Fibo support). A break below these would likely sideline bullish momentum in the short term.

Res: 77.88; 78.45; 79.35; 80.00;
Sup: 73.15; 72.57; 72.34; 71.19