Insights 
VT 
Key Points
- WTI crude falls to $73.33 after hitting $74.26 as U.S. remains silent on Tehran
- Fed signals two rate cuts by year-end, supporting medium-term demand outlook
West Texas Intermediate (WTI) crude oil futures slipped below $75 per barrel on Thursday, with prices closing at $73.33 following an intraday high of $74.26. The retreat reversed gains from earlier in the week, as traders adjusted positions in response to murky signals from Washington on possible U.S. intervention in the escalating Israel-Iran conflict.
President Trump met with senior defence and intelligence advisers on Wednesday to discuss Iran’s nuclear facilities, but the White House did not issue any conclusive statement on military action. With no immediate clarity, oil markets lost momentum, though prices remained elevated—still hovering near a five-month high as the Middle East standoff entered its seventh day.
The primary market risk remains the potential disruption of the Strait of Hormuz, a narrow but critical shipping lane for about 20% of global crude flows. Though Tehran has not threatened exports directly, any signal of blockade or retaliation could rapidly spike prices due to the region’s strategic importance.
From a macroeconomic lens, the Federal Reserve’s policy update added another layer of complexity. The central bank opted to hold interest rates steady on Wednesday but signalled that two rate cuts are expected before the end of the year. This dovish turn implies greater support for economic activity and, by extension, oil demand in the second half of 2025.
Technical Analysis
Over the past day, crude oil rallied sharply from around $67 to a peak of $74.26, then pulled back yet maintained a clear uptrend. The price action broke above the 5-, 10-, and 30‑period MAs in a strong bullish sweep, with the 5‑MA riding well above the longer averages—signalling robust short‑term momentum. A MACD crossover occurred following the breakout, and the histogram extended positive, confirming continued upward momentum.
Picture: Sharp oil rally stalls near $74.25, support still intact, as seen on the VT Markets app
However, a mild retracement followed the spike, as profit‑taking emerged near the $74 mark. The price briefly retested the 10‑MA (purple) and 30‑MA (yellow), finding support before consolidating just above $73.30. The MACD histogram contracted, yet the MACD lines remain above zero—suggesting that bulls still dominate.
While traders are now pricing in a more accommodative Fed outlook, geopolitical risk continues to dominate near-term sentiment. Should the U.S. take a more active military role or if Tehran targets energy infrastructure, crude prices could easily surge past the $75 level again. Until then, the market is likely to remain rangebound, with any shifts in diplomatic or military posture acting as the next trigger.
