$101.00 surpassed as Middle East supply risks lift WTI

• $101.20 is within reach as WTI surges in early Asian trading on Thursday.
• WTI gains support from an attack on a Saudi Arabian refinery and concerns over possible US strikes on Iran after the US midterm elections.
• A 1.462 million-barrel draw in crude inventories was recorded for the week ended 23 October, according to the EIA.

$101.20 is the approximate trading level for West Texas Intermediate (WTI) in Thursday’s early Asian session. The US crude oil benchmark is advancing as concerns resurface over further disruptions to Middle East energy supplies.

An attack on Aden airport by Yemen’s Iran-aligned Houthis took place on Wednesday, Reuters reported, following the group’s warning for people to leave the facility. A day earlier, on Tuesday, the Houthis said they had fired a ballistic missile towards the Ras Tanura oil refinery in eastern Saudi Arabia, the kingdom’s largest refinery.

Several Middle East countries and regional allies have been advised by US officials to prepare for a possible resumption of military action against Iran after next week’s US midterm elections. The warnings also covered the possibility of Iranian retaliation against them.

Dennis Kissler, senior vice president of trading at US financial services firm BOK Financial, said: "Crude futures once again pricing in nearer term tighter supplies on news the US is likely to re-start military operations soon, which could be more intense than in the past given the latest attacks on Saudi Arabia and other Middle East allies,"

A larger-than-expected draw in US crude inventories was reported last week. Energy Information Administration (EIA) figures showed a 1.462 million-barrel decline in the week ending 23 October, following a 3.061 million-barrel reduction the week before. Markets had expected inventories to fall by 300,000 barrels.

Crude upside bias persists on Middle East risks and freight costs

Near-term support for crude prices is likely to persist, according to TD Securities. The bank expects that "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." Pointing to the geopolitical risk premium already reflected in prices, its 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,"

Freight costs are also gaining importance in TD Securities’ assessment. The bank notes 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." Its analysts see higher freight costs and elevated geopolitical risks underpinning crude prices, although pressure on refining margins could constrain further upside.

100-day SMA underpins WTI’s constructive technical outlook

Well above both the 20-day Bollinger simple moving average and the 100-day simple moving average (SMA), WTI US Oil continues to advance on the daily chart. Prices are pushing into the upper half of the Bollinger envelope, leaving the near-term bias firmly bullish. At 63, the Relative Strength Index (14) signals bullish conditions without reaching overbought territory. Upward momentum therefore remains constructive rather than excessively stretched.

Around $104.00, the upper Bollinger band marks the first resistance area, where the recent strong advance could encounter profit-taking. Immediate support sits at the psychological $100.00 level. Below that are the middle Bollinger band near $95.10 and the lower band at approximately $86.15. A break below the latter could bring the 100-day SMA around $85.15 into focus. These support levels would be expected to draw dip-buying as long as the broader uptrend holds.

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