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WTI crude oil surged over 30% on Monday, reaching its highest levels since July 2022, driven by escalating geopolitical tensions in the Middle East and concerns over supply disruptions. The price briefly exceeded $120 per barrel before settling slightly below that level. Technical indicators show momentum has pushed the asset into overbought territory, raising questions about the sustainability of the rally. Analysts attribute the surge to renewed fears of conflict impacting major oil routes, particularly in the Strait of Hormuz, coupled with OPEC+ production discipline maintaining tight supply conditions. For traders, the sharp move highlights the sensitivity of energy markets to geopolitical risks. The surge could attract short-term speculative buying but may also trigger profit-taking as prices test key resistance levels. Broader implications include potential inflationary pressures and higher energy costs for global economies, with emerging markets in the Gulf facing particular exposure due to their reliance on oil prices for fiscal budgets. Looking ahead, investors should monitor OPEC+ policy decisions and regional security developments. Key technical levels to watch include $120.00 as immediate resistance and $115.00 as support. A break above $120.00 could signal a shift in the medium-term trend, while a pullback below $110.00 might indicate near-term weakness.
