WTI is heading towards a close with a 5% gain on the day

• WTI trades 5.10% higher and climbed through the 20-D EMA and the 50-D EMA.
• Tensions between Iran and the U.S. as the attacks in the Strait of Hormuz have escalated.

West Texas Intermediate oil rallied on Thursday on an increasingly concerning situation over the tensions between Iran and the U.S. as the attacks in the Strait of Hormuz have escalated to what now appears to be Iran attacking US military drones in the area. It has been reported that Iran shot down the U.S. drone and U.S. President Donald Trump said in a tweet that "Iran made a very big mistake!"

However, he was also claimed to have said that the Iran incident was ‘probably a mistake’ by an individual person and that he doesn’t feel like his administration is ‘pushing him towards conflict’. Either way, the price of oil is telling us what the markets feel about the situation and a barrel of oil is 5% more expensive on the day. 

Meanwhile, the Energy Information Administration reported yesterday that U.S. crude supplies dropped by 3.1 million barrels following two straight weeks of gains. Meanwhile, OPEC and its allies are scheduled to hold meetings on July 1-2 were extensions of cuts are expected which is also supporting the bid. 

WTI levels

WTI climbed through the 20-D Experiential Moving Average, (EMA), and the 50-D EMA, now en route for the 200-D EMA. A break there will expose the 30th May highs of $59.67 and of course the $60 psychological level. However, if the price can't sustain a bid, bears wi target back down to the 200 weekly EMA and the 61.8% Fibo. A full breakdown opens prospects for a correction to back towards the14th Jan 50.41 low and then the 26th November lows at 49.44.