WTI retreats towards $100 as key policy decisions take centre stage

• Oil retreats towards $100.00 after reaching a five-month high of $103.28.
• Unchanged interest rates are expected from the Fed, the ECB and the BoJ this week.
• Elevated escalation risk ahead of Israeli elections and US midterm elections is expected to keep oil prices firm.

Having reached a five-month high of $103.28, West Texas Intermediate (WTI) futures on NYMEX fall back towards $100 on Monday. Caution ahead of major monetary policy decisions from several global central banks weighs on oil as investors adopt a more guarded stance.

Markets look to three central banks for a rate hold ahead of further increases

Upcoming monetary policy meetings will dominate market attention for the rest of the week, according to analysts at Danske Bank, who write that “focus turns to interest rate decisions from the Fed on Wednesday, the ECB on Thursday and the Bank of Japan on Friday.” Outlining its outlook, the bank says it will “expect all three to keep interest rates unchanged before resuming rate hikes later this year,” pointing to a temporary pause in tightening rather than an end to the prospect of further increases.

Concerns over renewed escalation between the United States (US) and Iran drove substantial gains in oil last week. A US State Department call for a broader withdrawal of US diplomatic personnel from the Gulf prompted financial markets to adopt a cautious stance.

Oil retains an upward bias as geopolitical risks persist

A near-term upward bias remains in crude prices, according to TD Securities. Its analysts caution that “we expect crude oil will remain skewed to the upside in the near term as escalation risk ahead of Israeli elections and US midterm elections remains elevated.” Explaining the geopolitical premium in current prices, they observe that “recent Houthi strikes have seen risk premium pricing in the market increase, while persistent tanker attacks by Iran appear to have been successful in reducing some Hormuz flows,” lending further support to that premium.

WTI Technical Outlook Remains Bullish

At $100.51 on the daily chart, WTI US Oil remains comfortably above its 20-day Exponential Moving Average (EMA) of $95.68. This positioning sustains a bullish near-term outlook and suggests that the uptrend retains support despite the latest consolidation. A Relative Strength Index (RSI) reading of 62.99 also points to positive, though not excessive, upward momentum, remaining in bullish territory without reaching overbought levels.

The $100.51 area provides the first downside support and an immediate pivot. A more pronounced retreat could encounter stronger demand around the 20-day EMA at $95.68. As the current dataset identifies no nearby technical resistance, traders may keep their attention on price action above these support levels, assessing whether the bullish structure can extend or give way to a correction.

(The technical analysis of this story was written with the help of an AI tool. Know more.)