Watch These Key WTI Levels as Oil Prices Swing Wildly Amid Middle East Conflict

Oil prices went on a wild ride Monday as investors reacted to the latest developments in the Middle East conflict.

West Texas Intermediate futures, the U.S. crude oil benchmark, were trading at just below $67 late Monday, after rising to a five-month high of more than $77 per barrel when trading resumed after the U.S. struck three Iranian nuclear facilities over the weekend.

Investors worried that an intensification of fighting could affect oil supplies if infrastructure is damaged or shipping routes are blocked, which could spark inflation and hinder economic activity. Those concerns eased this afternoon after Iranian missiles launched toward a U.S. base in Qatar were intercepted, sparking optimism that the retaliation from Iran would be limited and that tensions in the region could ease.

Below, we take a closer look at the WTI oil weekly chart and use technical analysis to point out major price levels worth watching out.

Bearish Engulfing Pattern Emerges

The commodity’s price rallied to the top trendline of a multi-year descending channel in Monday’s trading session before staging a dramatic intraday reversal, forming a bearish engulfing pattern in the process.

The turnaround coincided with the relative strength index falling below its neutral threshold and the price closing below the 50-week moving average, signaling bearish price momentum.

Let’s identify several major support and resistance levels on the WTI chart that investors will likely be watching amid the commodity’s recent volatility.

Major Support Levels to Watch

Further selling could accelerate a slump toward $57. Investors may look for entry points in this area where the commodity finds a confluence of support from the descending channel’s lower trendline, last month’s swing low, and the completion of a pullback in March 2021.

A decisive breakdown below this major technical level opens the door for a drop to $44. Bargain hunters may seek buying opportunities in this area near the December 2018 swing low and the August 2020 swing high.

Key Resistance Levels to Monitor

Recovery efforts in the commodity could see an upswing to around $77. This level may provide selling pressure near the high of this week’s bearish engulfing bar, the descending channel’s upper trendline and multiple other peaks and troughs on the chart stretching back to July 2021.

Finally, buying above this level could fuel a rally toward $93. Investors who trade the commodity may seek exit points in this region near the notable September 2023 swing high, several countertrend peaks in late 2022 and a retracement trough that formed on the chart earlier that same year.

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As of the date this article was written, the author does not own any of the above securities.