WTI Crude Oil Price Forecast: US-Iran Conflict Reignites, Will a New Round of Oil Price Rises Begin?

TradingKey - As of the Asian session on July 9, after WTI ( USOIL) crude oil prices rebounded sharply for two consecutive trading days, oil prices hovered and adjusted around $73.30 today. From the technical chart, due to the recent deterioration of the US-Iran situation and the resumption of fire between the two sides, oil prices were driven to rebound significantly for two consecutive trading days, with a cumulative rebound of nearly 11%. However, yesterday oil prices failed to stand firmly above the resistance level of $75, causing oil prices to enter an adjustment phase today.

What drives the rise in crude oil prices?

From a fundamental perspective, the core factor dominating recent oil price trends remains the situation between the US and Iran.

The latest news indicates that the US has launched a new round of military strikes against Iran, targeting missiles, drones, radar, and naval-related facilities. This has significantly cooled market expectations for a ceasefire and negotiations between the US and Iran, while reigniting investor concerns over supply disruptions in the Middle East.

Trump's latest remarks have further amplified bullish sentiment in the market. He stated that the ceasefire between the US and Iran has ended and remarked that dealing with Iran is a waste of time. This stance implies that the US government's attitude toward Iran has shifted back to a hawkish stance, leaving the market concerned that it will be difficult for both sides to return to a stable negotiation framework in the short term.

Iran has also taken retaliatory action. According to reports, Iran launched attacks on US military bases in the Gulf region, targeting US facilities in places like Bahrain and Kuwait. This means the conflict is no longer confined to the Iranian mainland and single military targets, but has begun to spill over into the broader Gulf region. As the Gulf region concentrates major global crude oil export routes, any spread of military risk will directly impact tanker shipping, insurance costs, and export stability.

In the short term, as long as the US-Iran conflict does not de-escalate, WTI is likely to maintain high-level volatility and may even continue to challenge higher resistance levels. However, if both sides send signals of resuming negotiations, or if navigation through the Strait of Hormuz recovers faster than expected, the risk premium in oil prices could rapidly recede.

WTI Crude Oil Price Analysis: Oil Prices Poised to Rally to $80of

WTI crude oil daily chart, Source: TradingView

Looking at the daily chart of WTI crude oil, the oil price has successfully established a foothold above the $70 threshold during its strong rebound over the past two trading days. Previously, the oil price had been consistently suppressed below $70, and the overall market sentiment was weak. As the oil price broke through the two resistance levels of $70 and $73, long sentiment in the market was significantly amplified.

However, it is worth noting that although the oil price briefly broke through the $75 resistance level yesterday, reaching a high of $76.08, yesterday's closing price remained below the $75 resistance level. The oil price exhibited a false breakout pattern, which in turn put downward pressure on the oil price today.

As things stand, the oil price faces a resistance level at $75 above. If it can break through and hold above this level, the upside space for the oil price will open up, with the next target testing the $80 mark. On the downside, it faces a support level at $73; if the oil price falls below this level, it may decline further toward the $70 mark.