WTI Crude Oil Plunges 3% as Geopolitical Risks and Technical Barriers Collide

West Texas Intermediate (WTI) Crude Oil experienced a sharp 3.03% drop on Thursday, August 1, 2025, closing at $67.25 per barrel, down from its previous close of $69.35. This decline erased much of the week’s earlier gains, though WTI remains up approximately 2.25% week-to-date. The sell-off, which saw prices dip to a daily low of $67.05 after opening at $69.35, reflects a combination of technical resistance and heightened geopolitical uncertainties that continue to shape the volatile energy market.

Geopolitical tensions escalated after US President Donald Trump announced the deployment of two nuclear submarines near Russia, a response to provocative remarks by Dmitry Medvedev, Russia’s former President and current Deputy Chairman of the Security Council. Trump’s statement, posted on Truth Social, cautioned that such rhetoric could lead to “unintended consequences,” amplifying concerns about global energy security. This move follows Trump’s earlier threats of secondary tariffs on countries like India and China for importing Russian crude, further stoking fears of supply chain disruptions and contributing to market unease.

Technically, WTI remains locked within a symmetrical triangle pattern on the daily chart, defined by converging lower highs and higher lows. After facing rejection near the $70 psychological resistance earlier in the week, Thursday’s decline pushed prices closer to the ascending support line, which has held since early May. Technical analysts note bearish signals, with some identifying a Head and Shoulders pattern and others predicting a potential drop to support levels around $65.94 or lower if the triangle’s lower boundary breaks. The Relative Strength Index (RSI) near neutral levels and narrowing Bollinger Bands suggest a possible breakout looms, though the direction remains uncertain.

Market sentiment is further clouded by mixed fundamentals. While Trump’s tariff threats and sanctions rhetoric have fueled speculative spikes, global economic slowdown concerns and potential oversupply risks are capping upside potential. Some analysts predict a bearish turn, with forecasts ranging from a decline to $63.00 or even $60.00 if downward momentum accelerates. Others remain cautiously optimistic, citing strong demand and geopolitical risk premiums as supportive factors, with Fibonacci extension targets at $70.79 or higher if bulls regain control.

The sharp intraday drop underscores WTI’s vulnerability to both technical and external pressures. As prices test critical support near the triangle’s lower boundary, traders are bracing for heightened volatility. Upcoming economic indicators and any further developments in US-Russia relations or trade policies could prove pivotal in determining whether WTI rebounds or faces deeper losses in the near term.