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West Texas Intermediate (WTI) crude oil prices fell sharply on Thursday, reversing all gains from the previous day amid renewed geopolitical tensions between the US and Iran. At $71.75, the price dropped 3.77%, failing to hold above the critical 200-day simple moving average (SMA), a key technical resistance level. Analysts attribute the decline to heightened fears of supply disruptions, particularly in the Persian Gulf, where Iran's oil exports and regional stability remain sensitive issues.
For traders, the breakdown below the 200-day SMA signals a bearish shift, reinforcing the dominance of sellers in the market. Technical indicators like the RSI and MACD show oversold conditions, but this could attract short-term traders betting on further declines. However, the broader energy market remains vulnerable to sudden geopolitical shocks, which could trigger volatile swings.
Looking ahead, WTI may test the $70 psychological level, with a potential support zone around $68.50. Investors should monitor US-Iran diplomatic developments and OPEC+ production decisions for directional clues. A sustained close below $70 could open the door to a deeper correction, while a rebound above the 200-day SMA would signal a reversal in sentiment.
