WTI slides below $84.00 on firmer USD but US-Iran tensions limit deeper losses
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts fresh sellers following an intraday uptick to the $85.35 region and turns lower for the second straight day. The commodity slides below $84.00 during the early European session, though the downside potential seems limited.
The US Dollar (USD) is seen building on its modest recovery from the lowest level since May 14, touched last week, as inflation risks stemming from volatile energy prices keep bets for at least one Federal Reserve (Fed) rate hike in 2026 on the table. This turns out to be a key factor undermining demand for USD-denominated commodities, including crude oil prices, though the risk of a further escalation of US-Iran tensions could help limit deeper losses.
In the latest developments surrounding the Middle East crisis, Treasury Secretary Scott Bessent on Monday issued a warning for countries to cut any financial ties with Iran or risk being cut out of the dollar-based financial system. Meanwhile, Iran has vowed to shut down all oil exports from the Gulf if the economic war continues. The Iranian regime has also issued a fresh warning to ships not to pass through the Strait of Hormuz without permission.
Meanwhile, US Defense Secretary Pete Hegseth said on Monday the US would not rule out using military force against Iran. This keeps the geopolitical risk premium in play and might continue to act as a tailwind for crude oil prices. Moreover, a fall in oil stocks in the US Strategic Petroleum Reserve (SPR), to the lowest level since November 1982, warrants caution before positioning for an extension of the pullback from a three-week high, touched last Friday.
WTI 4-hour chart
Technical Analysis
WTI US Oil retains a near-term bullish bias above the 100-period Exponential Moving Average (EMA) pivotal support at $82.61 on the 4-hour chart. This backs the case for the emergence of some dip-buying interest despite the recent pullback from the mid-$86.00s. Moreover, a sustained hold above the $82.00 handle keeps the focus on a potential recovery toward recent cycle highs, while a break below the EMA would hint at a deeper corrective phase.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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