WTI falls below $93.50 on profit-taking, continued US-Iran tensions in focus

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $93.20 during the early European trading hours on Thursday. WTI falls as traders book some profits. However, the potential downside might be limited amid rising tensions in the US-Iran conflict and intensifying attacks on tankers in the Persian Gulf. Traders await the release of the US Energy Information Administration (EIA), which is due later on Thursday. 

Iranian senior official said on Wednesday that the Islamic Republic is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. US Secretary of State Marco Rubio said earlier this week that Iran continues to try to hit ‌US naval ships, and for every time they do that or try to do that, they're going to lose tankers. 

Reuters reported on Wednesday that Iran had attacked 10 ships near the Strait of Hormuz after the US sank five Iranian oil tankers, ‌in the biggest wave of attacks on shipping by both sides since the start of the six-month-old war. Worries about the flow of oil in the Middle East could boost the WTI price in the near term. 

“The risk is that escalation starts leading to meaningful disruptions to Strait of Hormuz flows. Oil flows have surprised to the upside in recent weeks, but the market could tighten more sharply if ongoing escalation translates into disrupted oil flows once again,” said ING commodity analysts. 

US crude oil inventories see a modest weekly draw. According to the American Petroleum Institute (API), crude oil stockpiles in the US for the week ending September 4 declined 300,000 barrels, compared to a fall of 2.6 million barrels in the previous week. The market consensus was for a decrease of 1.3 million barrels. 

Oil rally extends as conflict risks keep market tight

According to commodity strategists at TD Securities, crude prices continue to push higher as geopolitical risks show little sign of abating. They observe that crude “rallies with seemingly no end to conflict in sight,” with “another round of escalation and an apparent preference for limited attacks and economic squeeze as opposed to deal-making” leaving the energy market “on a continued tightening trajectory.” In their view, this combination of persistent tensions and a strategy focused on pressure rather than resolution is reinforcing the underlying tightness in oil fundamentals and sustaining upside pressure on prices.

Technical Analysis: WTI retains a constructive outlook above the 100-day SMA

In the daily chart, the near-term bias of WTI US Oil stays bullish as price holds well above the Bollinger simple moving average (SMA) mid-line and the 100-day moving average, suggesting the recent uptrend remains supported despite the latest pullback. The Relative Strength Index (RSI) at 66.6 hovers just below overbought territory, hinting that upside momentum is still constructive but could be prone to bouts of consolidation.

On the topside, immediate resistance is aligned with the upper Bollinger band at roughly $94.60, where a clear break would open the way for further gains toward higher psychological levels. On the downside, initial support is seen at the Bollinger mid-line around $86.60, followed by the 100-day moving average at $85.25, while a deeper correction toward the lower Bollinger band near $78.65 would be needed to materially challenge the broader bullish structure.