WTI crude oil (CL) rebounded on Wednesday after a sharp two-day decline. The price recovered above $65, gaining over 0.75%. The rebound followed oversold conditions after Monday and Tuesday’s steep drop, the worst since 2022. Additionally, traders responded to improved sentiment and fresh data showing a tightening supply.
The US Energy Information Administration reported a larger-than-expected drawdown in crude inventories. The chart below shows that stockpiles fell by 5.836 million barrels, far exceeding the forecasted decline of 0.6 million barrels. This marks the fifth consecutive weekly drop, indicating strong summer demand and tighter supply conditions. The data helped lift oil prices from recent lows.
Moreover, geopolitical tensions also eased slightly after the Iran-Israel ceasefire showed signs of stability. While early violations raised concerns, markets adopted a risk-on stance. However, the ceasefire remains fragile. Any new conflict could quickly restore the risk premium in oil. Traders remain alert to developments that could shift sentiment again.
The daily chart for WTI Crude Oil shows that the price dropped following the Iran-Israel ceasefire. The price closed below the 200-day SMA, signaling weakness. Currently, the price is consolidating between the 50-day and 200-day SMAs. The 50-day SMA remains below the 200-day SMA, indicating continued uncertainty.
Despite this, the price is holding within the orange zone, a long-term support area between $63 and $66. This zone has acted as a base during previous corrections. A break above $69 could pave the way for a move toward $75. Conversely, a drop below $62 may trigger further downside pressure.
WTI Oil 4-Hour Chart – Descending Broadening Wedge
The 4-hour chart for WTI Crude Oil shows that the price is trading within a descending broadening wedge pattern. The breakout from $70 reached resistance around the $77 area, aligning with the target of the pattern.
A break below $64 could trigger further downside, but price action remains uncertain amid ongoing geopolitical developments. Despite the ceasefire between Iran and Israel, the market remains cautious and awaits clear direction.
