WTI falls below $93.50 on profit-taking, continued US-Iran tensions in focus
- WTI price tumbles to near $93.20 in Thursday’s early Asian session.
- Iran said it is ready for a more intense war if the US continues attacking its territory and infrastructure.
- US crude inventories declined by 300,000 barrels in the week ending September 4, EIA showed.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $93.20 during the early European trading hours on Thursday. WTI falls as traders book some profits. However, the potential downside might be limited amid rising tensions in the US-Iran conflict and intensifying attacks on tankers in the Persian Gulf. Traders await the release of the US Energy Information Administration (EIA), which is due later on Thursday.
Iranian senior official said on Wednesday that the Islamic Republic is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. US Secretary of State Marco Rubio said earlier this week that Iran continues to try to hit US naval ships, and for every time they do that or try to do that, they're going to lose tankers.
Reuters reported on Wednesday that Iran had attacked 10 ships near the Strait of Hormuz after the US sank five Iranian oil tankers, in the biggest wave of attacks on shipping by both sides since the start of the six-month-old war. Worries about the flow of oil in the Middle East could boost the WTI price in the near term.
“The risk is that escalation starts leading to meaningful disruptions to Strait of Hormuz flows. Oil flows have surprised to the upside in recent weeks, but the market could tighten more sharply if ongoing escalation translates into disrupted oil flows once again,” said ING commodity analysts.
US crude oil inventories see a modest weekly draw. According to the American Petroleum Institute (API), crude oil stockpiles in the US for the week ending September 4 declined 300,000 barrels, compared to a fall of 2.6 million barrels in the previous week. The market consensus was for a decrease of 1.3 million barrels.
Oil rally extends as conflict risks keep market tight
According to commodity strategists at TD Securities, crude prices continue to push higher as geopolitical risks show little sign of abating. They observe that crude “rallies with seemingly no end to conflict in sight,” with “another round of escalation and an apparent preference for limited attacks and economic squeeze as opposed to deal-making” leaving the energy market “on a continued tightening trajectory.” In their view, this combination of persistent tensions and a strategy focused on pressure rather than resolution is reinforcing the underlying tightness in oil fundamentals and sustaining upside pressure on prices.
Technical Analysis: WTI retains a constructive outlook above the 100-day SMA
In the daily chart, the near-term bias of WTI US Oil stays bullish as price holds well above the Bollinger simple moving average (SMA) mid-line and the 100-day moving average, suggesting the recent uptrend remains supported despite the latest pullback. The Relative Strength Index (RSI) at 66.6 hovers just below overbought territory, hinting that upside momentum is still constructive but could be prone to bouts of consolidation.
On the topside, immediate resistance is aligned with the upper Bollinger band at roughly $94.60, where a clear break would open the way for further gains toward higher psychological levels. On the downside, initial support is seen at the Bollinger mid-line around $86.60, followed by the 100-day moving average at $85.25, while a deeper correction toward the lower Bollinger band near $78.65 would be needed to materially challenge the broader bullish structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI Oil FAQs
What is WTI Oil?
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
What factors drive the price of WTI Oil?
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
How does inventory data impact the price of WTI Oil
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
How does OPEC influence the price of WTI Oil?
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.