WTI posts modest gains above $81.50 as traders weigh US-Iran deadlock
- WTI price posts modest gains near $81.60 in Monday’s Asian session.
- Iranian officials told the US to “accept the reality of defeat.”
- Traders will closely monitor Lebanon tensions and Hormuz risks.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $81.60 during the Asian trading hours on Monday. WTI remains volatile as talks to reopen the Strait of Hormuz have completely deadlocked.
Bloomberg reported that Lebanon saw its deadliest day of fighting in months on Sunday, as Israel struck Tehran-backed Hezbollah. Furthermore, Iran’s Deputy Foreign Minister Kazem Gharibabadi over the weekend told US President Donald Trump to “accept the reality of defeat and stop indulging in delusions” after US President Donald Trump suggested that he would soon declare the Strait of Hormuz a “territory of the United States.”
Iran’s Foreign Minister Abbas Araghchi said that there were “no negotiations currently taking place between Tehran and Washington.” Araghchi added that the US must agree to Iran’s conditions in order for shipping to resume through the waterway. Meanwhile, Russia is facing fuel shortages after Ukraine resumed near-daily attacks on oil refineries.
Traders await the release of the American Petroleum Institute (API) weekly crude oil report, which is due later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might undermine the WTI price.
Oil demand outlook softens as IEA and OPEC trim forecasts
Commerzbank notes that both major forecasting agencies have turned more cautious on the near-term demand outlook. The bank highlights that “the IEA and OPEC have each revised their forecasts for oil demand this year downwards by 200,000 barrels per day.” As a result, “the IEA now expects demand to fall by 1.6 million barrels per day, whilst OPEC still anticipates an increase of 580,000 barrels per day,” underscoring a still-sizeable divergence in their assessments of underlying consumption trends. On the supply side, Commerzbank points out that, “according to the IEA, oil supply from outside OPEC+ is set to rise by 690,000 barrels per day,” adding another layer of potential looseness to the market balance.
Technical Analysis: WTI is neutral to slightly constructive in the near term
In the daily chart, the near-term tone of WTI US Oil is neutral to slightly constructive, as price holds just above the Bollinger middle band, yet remains capped beneath the 100-day SMA near $86.38. This configuration suggests a consolidative phase within a broader corrective structure, while a mid-range Relative Strength Index (RSI) reading around 53 points to balanced momentum rather than a decisive directional push.
On the topside, initial resistance is defined by the 100-day SMA at $86.40, with the upper Bollinger band near $90.10 acting as a higher bullish trigger if buyers regain control. On the downside, immediate support is seen at the 20-day SMA/Bollinger midline around $81.60; a break lower would expose the lower Bollinger band support near $73.10, where stronger dip-buying interest could emerge.
(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.