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WTI Crude Sinks Below $70 as War Gap Fills
WTI crude slipped below $70 as the Middle East risk premium evaporated. The war gap is filled. Traders now watch for a floor near $70 and a summer range up to $78.75.
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WTI crude slipped below $70 a barrel, erasing the gap left by the Middle East conflict spike. Brent crude tested the same level. The risk premium that drove prices higher after hostilities flared has fully evaporated, said Chris, a proprietary trader with more than 20 years of experience.
The initial spike was driven by fear of supply disruption. No actual barrels were taken offline. The premium bled away as the market realised output remained unaffected. The same pattern played out in prior Middle East conflicts, Chris noted.
The gap fill is complete. The market now sits at a level that has acted as support in the past. Chris sees a potential summer range between $70 and the 200-day EMA near $78.75. That moving average has capped rallies in recent months.
Price action has slowed. Volume is thinning. That suggests consolidation, not a breakdown. Chris is not rushing to buy but expects a bounce in this area. The timing is uncertain – days or weeks.