WTI crude oil price steadies above $63 as geopolitical risk offsets supply uncertainty

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WTI crude oil analysis

Highlights

WTI trades near $63.41, down 0.75%, but remains above its 200-day EMA, signaling improving technical structure.
Geopolitical risk has intensified after U.S.–Iran tensions in the Strait of Hormuz, supporting a risk premium in prices.
A large 11.1 million barrel API crude draw adds to the bullish case, while OPEC+ and diplomacy cap upside.

Price action reflects a market caught between improving technical structure and headline-driven volatility, with geopolitics and inventory data driving near-term positioning rather than conviction.

Technical structure improves but resistance looms

From a technical standpoint, WTI has made notable progress by breaking above its 200-day exponential moving average near $62.54. This level had capped price for much of the year, and the reclaim is widely viewed as a potential signal of a medium-term trend shift. The 50-day EMA around $61.62 has also flipped into support, reinforcing the idea that downside pressure has eased for now. Below that, the 100-day EMA near $60.64 provides an additional buffer should sentiment weaken.

WTI price dynamics (Source: TradingView)

Momentum indicators support this cautious optimism. The RSI is holding near 58, rising but not yet stretched, suggesting buyers are gaining traction without pushing the market into overbought territory.

However, WTI continues to test a descending trendline that has defined price action through much of 2025. Multiple rejections from this trendline remain visible on the chart, making the $64 to $65 zone a critical hurdle. A decisive move above that resistance band would likely open the door toward $66 to $68, an area that previously attracted selling interest late last year.

Geopolitical risk injects premium into prices

Fundamental drivers have added support as tensions in the Middle East escalate. Reports that the United States downed an Iranian drone near a U.S. aircraft carrier, alongside IRGC vessels harassing a U.S.-flagged tanker in the Strait of Hormuz, have revived concerns over potential supply disruption. The strait remains one of the world’s most critical energy chokepoints, making oil prices highly sensitive to any threat to shipping flows.

While no physical supply has been interrupted, the renewed focus on Hormuz highlights how quickly risk premium can return after periods of relative calm. Traders have responded by rebuilding geopolitical hedges, reinforcing near-term price support.

Inventory data has added to the constructive tone. The American Petroleum Institute reported an 11.1 million barrel draw in U.S. crude stocks last week, the largest since June if confirmed by official EIA figures. The draw points to tighter domestic supply conditions and supports the recent recovery in prices.

OPEC+ and diplomacy temper upside expectations

Despite these supportive factors, upside remains capped by policy and diplomatic risks. U.S.–Iran talks scheduled for Friday could ease tensions if progress is made, potentially unwinding some of the geopolitical premium embedded in prices.

Supply policy is another key variable. OPEC+ is set to decide on March 1 whether to resume monthly output increases after pausing additions in the first quarter. While the group expects demand to improve from March and April, any decision to raise production could limit gains and reinforce resistance.

For now, WTI remains caught between improving technical structure and headline-driven risk. Support near $62.50 underpins the bullish bias, while resistance in the $64 to $65 zone continues to define the near-term ceiling.

As previously discussed, WTI crude oil had been attempting to base above long-term support, with traders watching whether geopolitical risk could help price sustain a move beyond entrenched resistance levels.

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