WTI plummets below $61 in sudden selloff

• US President Trump says Iran is orchestrating attack on US embassy in Iraq.
• Coming up: API's weekly crude oil stock report. 

Crude oil prices came under heavy selling pressure in the last hour and the barrel of West Texas Intermediate dropped to a fresh weekly low of $60.68. As of writing, the WTI was down 1.13% on the day at $60.95.

Focus shifts to Middle East

Following the US' airstrikes in Syria and Iraq, protestors in Iraq set fire to the US embassy in Baghdad. Responding to this event, "Iran is orchestrating an attack on the US embassy in Iraq," US President Trump tweeted out and added: "They will be held fully responsible. In addition, we expect Iraq to use its forces to protect the Embassy, and so notified!"

Although escalating geopolitical tensions in the Middle East usually provide a boost to crude oil prices as they are assessed as factors that could cause declines in oil the region's output, the WTI's action suggests that investors are opting out to book their profits rather than pricing possible supply disruptions. 

Commenting on the developments in the Middle East, "considering that Iraq is the second-largest OPEC producer with production around 4.6 million barrels per day, market participants may add a risk premium to oil tension if tensions last for longer," UBS oil analyst Giovanni Staunovo told Reuters on Tuesday. "That said, we need to see if the latest protests spread also in the south of the country, where most of the crude is exported."

Later in the day, the American Petroleum Institue will publish its last weekly crude oil supply report of the year.

Technical levels to watch for