WTI pulls back towards $100 as key policy decisions take centre stage

• Oil faces a correction towards $100.00 after touching a five-month peak of $103.28.
• This week’s policy meetings are expected to see the Fed, the ECB and the BoJ hold interest rates steady.
• Elevated escalation risks ahead of Israeli elections and US midterm elections are expected to keep oil prices firm.

Caution ahead of major global central banks’ monetary policy announcements weighs on oil prices on Monday. West Texas Intermediate (WTI) futures on NYMEX pull back towards $100 after reaching a five-month peak of $103.28.

Will three central banks hold rates steady before resuming hikes later?

Upcoming monetary policy meetings will dominate market attention for the rest of the week, according to analysts at Danske Bank, who say the “focus turns to interest rate decisions from the Fed on Wednesday, the ECB on Thursday and the Bank of Japan on Friday.” While further rate increases remain the broader expectation, the bank anticipates a pause in tightening for now, stating that it would “expect all three to keep interest rates unchanged before resuming rate hikes later this year,” highlighting the distinction between the near-term outlook and the path later in the year.

Fears of renewed escalation between the United States (US) and Iran drove a sharp rise in oil prices last week. A US State Department call for a broader withdrawal of US diplomatic personnel from the Gulf prompted caution across financial markets.

Can escalation risks keep oil prices supported?

TD Securities sees near-term risks to crude prices tilted upwards. Its analysts warn 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.” Geopolitical risk continues to underpin the premium in current prices, with the analysts noting 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,” pointing to continued supply concerns.

WTI Technical Analysis: Can the Bullish Bias Hold?

Recent consolidation has not displaced WTI US Oil’s near-term bullish bias on the daily chart, where the contract trades at $100.51. Prices remain comfortably above the 20-day Exponential Moving Average (EMA) of $95.68, indicating continued support for the uptrend. At 62.99, the Relative Strength Index (RSI) is in bullish territory without reaching overbought levels, signalling positive but not excessive upward momentum.

The $100.51 zone serves as the immediate pivot and initial downside support. A more pronounced correction could bring stronger underlying demand near the 20-day EMA at $95.68 into focus. As the current dataset identifies no nearby technical resistance, traders may watch price action above these support levels to assess whether the bullish structure can extend or a corrective phase takes shape.

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