Oil Prices Climb Amid US Sanctions on Iran – Will WTI Break $71.70?
Oil prices rose for the second consecutive day on Tuesday as the United States imposed fresh sanctions on Iran, heightening concerns about a potential supply squeeze.
The sanctions target over 30 brokers, tanker operators, and shipping companies involved in transporting Iranian oil, underscoring President Donald Trump’s intent to bring Iran’s crude exports to zero.
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Iran, the third-largest producer within the Organization of the Petroleum Exporting Countries (OPEC), pumped 3.2 million barrels per day in January, according to a Reuters survey. With these new sanctions, market analysts anticipate tighter global supply conditions.
“WTI is searching for a base within the $65 to $70 support range,” said Tony Sycamore, market analyst at IG. “If prices hold above this zone, a recovery is likely to follow.” As a result, West Texas Intermediate (WTI) Crude Oil is showing signs of stabilization after rebounding from key support levels.
US Tariffs and Geopolitical Tensions Cloud Demand Outlook
While supply concerns support oil prices, demand uncertainty looms. President Trump confirmed on Monday that tariffs against Canadian and Mexican imports are set to commence on March 4, despite ongoing negotiations. Analysts caution that these tariffs could dampen global oil demand growth, adding to market volatility.
In Europe, Ukraine commemorated the three-year anniversary of Moscow’s invasion with European leaders, but U.S. officials were notably absent, reflecting Trump’s closer ties with Russia. This geopolitical shift is seen by analysts as a potential easing of sanctions on Russia, which could increase global oil supply, counteracting the impact of the Iran sanctions.
The mixed geopolitical landscape is keeping traders on edge as they weigh supply risks against potential demand slowdowns.
Technical Analysis: Can WTI Break $71.71 Resistance?
WTI Crude Oil (USOIL) is trading at $71.17, demonstrating a modest recovery after bouncing off the key support level at $70.07. The price is now approaching the 50 EMA at $71.21, which serves as immediate resistance.
A successful break above this level could pave the way for further gains towards the next resistance at $71.71, followed by $72.77.
However, the broader downtrend remains intact, constrained by a descending trendline from previous highs. If WTI fails to break above $71.21, it could retrace towards the $70.88 support level. A break below this level would open the door for a retest of the crucial $70.07 support zone.
The overall outlook remains cautiously bearish as long as prices trade below the 50 EMA and the descending trendline. Traders should watch for a decisive move above $71.71 or a drop below $70.07 to gauge the next directional move.
Key Insights:
Immediate Resistance: $71.21 and $71.71; breaking above could target $72.77.
Immediate Support: $70.88; breaking below could target $70.07.
Bearish Bias: Maintained below the 50 EMA and descending trendline.
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