**BREAKING: Oil Prices Dip After Thursday Rally But Middle East Tensions Cap Losses**
West Texas Intermediate crude oil is retreating Friday as traders book profits following Thursday’s sharp 6 percent surge. The pullback comes as market participants reassess positions after the previous session’s strong gains driven by escalating Middle East conflict.
Despite the profit-taking pressure, downside momentum remains limited as supply disruption fears intensify. The expanding regional war threatens two critical global energy chokepoints: the Strait of Hormuz and Bab el-Mandeb strait. These waterways handle substantial portions of worldwide oil shipments, and any disruption could trigger immediate supply shortages.
Technical indicators show WTI bulls are testing the 100-day simple moving average, with underlying momentum signals still pointing bullish. The conflicting pressures between short-term profit-taking and geopolitical supply risks are keeping crude in a volatile range.
Traders, brokers and energy market participants should monitor Middle East developments closely as supply route threats could rapidly reverse current losses.
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FXnCO Insight
** Consider maintaining hedged oil positions as geopolitical supply risks provide a solid price floor despite near-term technical profit-taking.
Source: FXStreet