How did a strike on a Saudi refinery lift WTI above $100.50?

• WTI advances towards $100.75 as early European trading gets under way on Wednesday.
• Saudi Arabia’s Ras Tanura oil refinery was struck by a missile, Yemen's Houthis claim.
• API reported a 2.031 million-barrel decline in crude oil stocks for the week ended October 23.

Renewed concerns over supply risks from major exporter Saudi Arabia are lifting West Texas Intermediate (WTI) following an attack on one of the country’s refineries. The US crude oil benchmark is trading near $100.75 in Wednesday’s early European session.

According to Reuters, Yemen's Iran-aligned Houthis launched a ballistic missile on Tuesday towards the Ras Tanura oil refinery in eastern Saudi Arabia. The facility is the kingdom’s largest refinery.

A higher probability of renewed escalation continues to be priced into the market for now, according to ING commodity strategists. They added: "Oil prices remain elevated as the market waits for greater clarity on President Trump's next move toward Iran,"

Last week brought another decline in US crude oil inventories, the American Petroleum Institute (API) reported. Stockpiles dropped by 2.031 million barrels in the week ending October 23, following a 4.93 million-barrel draw in the preceding week.

Attention now turns to the Energy Information Administration (EIA) crude oil inventory report, due later on Wednesday. A draw exceeding expectations would point to stronger demand and could support WTI prices. Conversely, a larger-than-forecast build would suggest softer demand or surplus supply, potentially weighing on WTI.

Can Middle East risks keep oil’s outlook bullish as freight costs rise?

A near-term upward bias in crude prices remains likely, according to TD Securities. Its analysts explain 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.” The geopolitical premium in oil benchmarks also continues to find support from supply disruptions. The analysts note 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,” while highlighting the growing role of transport costs. TD Securities cautions that “beyond escalation in the Middle East conflict, freight rates have increasingly become the important marginal driver, with elevated landed prices for refiners potentially putting a cap on crude oil upside as weaker margins may limit refiner runs,” indicating that higher shipping costs could increasingly restrain price gains despite persistent geopolitical risks.

Technical Analysis: Can WTI sustain its bullish outlook above the 100-day SMA?

A positive technical bias remains evident on the daily chart for WTI US Oil, with prices holding well clear of the 20-day Bollinger middle band and comfortably above the 100-day moving average. Trading is pushing into the upper half of the Bollinger envelope. Meanwhile, the Relative Strength Index (14), at roughly 62, remains in positive territory without signalling overbought conditions. This points to continuing upward pressure, although corrective pauses remain possible.

The upper Bollinger band near $103.95 marks immediate resistance and the next significant supply zone that bulls may encounter. Initial support lies around $95.05 at the 20-day Bollinger middle band. Below that, the lower Bollinger band near $86.15 and the 100-day moving average just above $85.00 offer a deeper cushion. Together, these levels form the broader bullish floor for as long as they hold.

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