WTI crude oil has been on a tear lately, boosted by U.S. sanctions on firms related to Iran oil exports.
How high can Black Crack fly before the sellers step back in?
We’re watching U.S. oil’s 4-hour chart for clues!
WTI Crude Oil (USOIL) 4-hour Chart by TradingView
In case you missed it, oil prices gained momentum late last week after Treasury Secretary Bessent announced new sanctions targeting Chinese importers of Iranian crude, vowing to “apply maximum pressure on Iran and disrupt the regime’s oil supply chain.” This supply constraint story helped crude jump 3.5% in a single session, pushing prices through the 38.2% Fibonacci level.
What’s particularly interesting is how crude has managed to climb despite broader economic concerns from tariff escalations. This disconnect suggests supply factors are currently outweighing demand worries in traders’ calculations.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on WTI crude oil and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Will USOIL return to its longer-term downtrend?
This week’s flash PMIs for April will provide crucial insight into how businesses are responding to the new tariff environment. Any significant deterioration in manufacturing sentiment could renew demand concerns and cap crude’s rally.
Crude oil is now sporting red candlesticks around the 50% Fibonacci level, which isn’t too far from the 4-hour chart’s Pivot Point ($62.57) line.
However, we can’t discount a trip to the $66.00 psychological level as it lines up with the 61.8% Fibonacci line, the R1 ($65.25) Pivot Point line, 100 SMA, and a support zone back in March.
A sustained break above the 50% Fib could accelerate the move toward the 61.8% level and potentially challenge the declining trend line that connects the January and March highs.
However, traders should note that price remains below both the 100 and 200 SMAs, suggesting the longer-term downtrend remains intact.
Keep an eye out for more bearish candlesticks and consistent trading below $62.00, which may drag WTI crude oil back to its April lows.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
