WTI Crude Oil retreats from six-month high as tensions, supply weigh

West Texas Intermediate (WTI) US Oil trades around $65.95 on Tuesday at the time of writing, down 0.68% on the session, after having reached a six-month high of $67.23 on Monday. The bearish reversal comes as investors weigh persistent geopolitical risks in the Middle East against macroeconomic factors that could weigh on demand.

Tensions between the United States (US) and Iran remain in focus. Diplomatic talks are set to continue this week in Geneva, while Washington maintains political and military pressure on Tehran. Iranian naval exercises in the Strait of Hormuz, through which roughly 20 million barrels per day transit, have revived fears of potential supply disruptions. This backdrop continues to support a geopolitical risk premium embedded in Crude Oil prices.

At the same time, the market faces the prospect of more abundant supply in the medium term. The US Energy Information Administration (EIA) expects global inventories to rise, as production growth is projected to outpace consumption. The agency forecasts global stockpiles to increase by an average of 3.1 million barrels per day this year, above the build anticipated in 2025. These projections point to a potentially more balanced, or even oversupplied, market environment over the year.

In addition, trade uncertainty has resurfaced after the US administration signaled plans to introduce new national security tariffs following a Supreme Court decision that invalidated some previous levies. A proposed 15% global tariff has been mentioned, reviving concerns about global growth and energy demand.

Against this mixed backdrop, WTI’s pullback reflects a market torn between persistent supply-side geopolitical risks and growing questions about the outlook for global demand. Attention is now turning to the release of the American Petroleum Institute (API) Weekly Crude Oil stock data later in the day, which could provide fresh direction for prices in the near term.

WTI Technical Analysis

In the 4-hour chart, WTI US OIL trades at $65.97. The near-term bias is mildly bullish as price holds comfortably above the rising 50-period and 100-period Simple Moving Averages (SMAs) clustered around $64.50–$64.00, reinforcing an underlying uptrend from the established ascending support line that has been guiding price higher from below $60. The Relative Strength Index (RSI) has eased back to 53 after spending time in overbought territory above 70, suggesting momentum has normalized without a decisive shift in favour of sellers, while the prior break above the former trend-line reaction zone near $65.20 underlines that buyers still control the short-term structure.

Immediate resistance aligns at recent highs near $67.00, which capped the latest advance and remains the level bulls need to clear to extend the uptrend toward higher highs. On the downside, initial support is seen around $66.20–$65.90, where recent pullbacks have stabilized, with stronger support emerging near the confluence of the 50-period SMA and the rising trend line in the $64.50 area. A break below that region would expose the next support around $63.50, whereas a sustained move above $67.00 would open the way toward the upper $60s and reinforce the prevailing bullish bias.

(The technical analysis of this story was written with the help of an AI tool.)