13 June 2025,03:33
Daily Market Analysis
13 June 2025, 03:33
Key Takeaways:
*WTI rallies toward $72 as Middle East tensions stoke supply fears and geopolitical risk premiums.
*Iran-Israel conflict risk and U.S. embassy evacuations fuel volatility, lifting bullish positioning.
*Tight inventories and falling rig counts support the rally, even as trade uncertainty lingers.
WTI crude oil extended gains this week, rallying toward $72/bbl as escalating Middle East tensions drove risk premiums higher. Markets reacted sharply to reports of potential Israeli military action on Iranian nuclear sites, while Tehran threatened retaliation if provoked. The U.S. evacuation of embassy personnel in Iraq, Bahrain, and Kuwait further amplified fears of regional conflict, with IAEA censure threats adding fuel to the fire.
Despite rising tensions, oil’s upside was capped by trade-driven growth concerns and signals of rising supply. Trump’s tariff comments—targeting July 9 as a decision deadline—raised alarms over a potential return to trade wars, with traders fearing another blow to global consumption. While U.S.–China talks made marginal progress, including pledges on rare earth supply, structural uncertainties linger, especially with Beijing resisting deeper concessions.
Supply-side signals were mixed. Saudi Arabia hinted at raising output by 411k bpd in August to stabilize markets and rein in overproduction from Iraq, tempering price momentum. Meanwhile, U.S. crude inventories remain tight—8.3% below seasonal averages—but floating storage rose over 9% WoW, raising near-term glut concerns. Rig counts fell to a 3.5-year low, yet U.S. output remains elevated near 13.4M bpd, highlighting supply resilience despite lower drilling activity.
Volatility surged alongside option flows, with bullish call interest outpacing puts as traders positioned for event risk. WTI faces near-term resistance around $73.50—the April high.
Looking ahead, traders will watch OPEC+ compliance meetings and Sunday’s Iran nuclear talks in Muscat for clarity on the supply path. U.S. inventory data and incoming Fed guidance may also influence demand expectations as markets reassess the global growth trajectory amid rising macro and geopolitical crosscurrents.
Technical Analysis
USOIL extends its rally above the 74.00 handle, breaking decisively out of a rising channel and invalidating prior consolidation structure. This breakout follows a series of higher lows and a sustained bullish bias above the $66.85 pivot zone, culminating in an aggressive upside surge that clears the April high. The move reflects both fundamental risk premium pricing and technical breakout confirmation. With the $75.95 resistance now under pressure, WTI is attempting to establish a new bullish leg, though the vertical nature of the recent advance may raise near-term exhaustion risks.
Momentum signals are firmly bullish but nearing overbought territory. The Relative Strength Index (RSI) has surged to 79, well above the 70 overbought threshold, suggesting a strong uptrend. Meanwhile, the MACD remains strongly supportive of the trend, with the MACD line rising steeply above the signal line and histogram bars accelerating to the upside.
Structurally, crude oil has transitioned into a breakout phase. A successful hold above the 75.95 zone would reinforce bullish control and open the path toward the psychological $80.00 level. However, failure to sustain momentum could see a pullback toward 71.25 — now a key support zone following the breakout — with the lower bound of the former channel around 66.85 acting as secondary support. The next few sessions will be critical in determining whether the rally can evolve into a sustainable uptrend or if profit-taking will induce a corrective fade.
Resistance Levels: 75.95, 71.25
Support Levels: 66.85, 63.75
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