West Texas crude oil has staged a stunning bullish reversal driven by escalating Israel Iran conflict and supply disruption fears in the Middle East. Technical analysis highlights a major bullish breakout and potential for continued uptrend.
Chart of the week: WTI
After a horrendous decline of -32% from the start of 2025 to April, West Texas crude oil has staged a stunning bullish reversal driven by supply-side and geopolitical risk premium factors
WTI crude oil rallied by 16% in the past two weeks to hit a six-month high, driven by the Israel-Iran conflict. At this juncture, there are no clear signs of de-escalation, especially since US President Trump did a U-turn over the weekend, when he authorised a US airstrike to bomb Iranian nuclear enrichment facilities and forgo his earlier “two-week grace period” for diplomacy.
Right now, Iran has options to further retaliate via disrupting regional oil trade, especially through the Strait of Hormuz, to inflict economic damage on the US.
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Fig 1: West Texas Oil CFD medium-term trend as of 23 June 2025 (Source: TradingView)
The West Texas Oil CFD (a proxy for WTI crude oil) has staged a bullish breakout and positive follow-through over the past two weeks, on 9 and 16 June, above its former major descending trendline resistance from the 28 September 2023 high.
Hence, this major bullish breakout has suggested that the major downtrend phase of West Texas Oil may have ended, and it has now kick-started a potential medium-term uptrend phase.
Since its 30 May 2025 low of US$60.13 to 13 June 2025 high of US$76.29, the price actions of West Texas Oil CFD have transformed into a parabolic ascending channel that represents a bullish acceleration movement within its medium-term uptrend phase.
Watch the US$73.60 key medium-term pivotal support for the next medium-term resistances to come in at US$80.30, US$83.30/84.90, and US$87.85/89.70 (5/12 April 2024 swing high and Fibonacci extension level).
On the other hand, failure to hold at US$73.60 key support negates the bullish scenario to revive a corrective decline sequence to expose the next medium-term supports at US$70.60/69.15 (200-day moving average), and US$67.00/66.30 (20-day moving average).
