WTI Price Forecast: Bears await acceptance below $88.00, 50% Fibo. support breakdown
- WTI meets with a fresh supply amid easing supply concerns, though the downside seems cushioned.
- The US-Iran standoff keeps the geopolitical risk premium in play and should support the commodity.
- A convincing break below the 50% Fibo. support is needed to back the case for further depreciation.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – comes under some renewed selling pressure during the Asian session on Thursday, reversing the previous day's modest recovery gains. The commodity, however, holds above the $88.00 mark and a nearly four-week low as traders await further developments surrounding the Middle East crisis.
Recovery in flows through the Saudi East-West pipeline is seen as a key factor weighing on crude oil prices. However, the US-Iran standoff keeps the geopolitical risk premium in play, which should help limit the downside for the commodity. In fact, hopes for a diplomatic solution to end the US-Iran war faded after President Donald Trump turned down a seven-day peace proposal from Iran. Moreover, Trump has told aides that he expects major combat operations and renewed bombing against Iran to resume following the November midterm elections.
From a technical perspective, the overnight failure to find acceptance above the 200-period Simple Moving Average (SMA) on the 4-hour chart and the subsequent slide favor bearish traders. Moreover, the Moving Average Convergence Divergence (MACD) remains below zero with a slightly negative reading, and the Relative Strength Index (RSI) around 38 suggests lingering downside pressure rather than a decisive oversold reversal. Crude oil prices, however, hold above the 50.0% Fibonacci retracement at $87.75, which should act as a nearby pivot.
A sustained break lower would expose deeper structural supports at the 61.8% retracement at $84.37 and then the 78.6% level at $79.56, ahead of the cycle floor near $73.44. On the topside, initial resistance is seen at the 200-period SMA at $90.11, followed by the 38.2% Fibo. retracement at $91.13, which capped the overnight recovery attempt. Meanwhile, a more substantial bullish reprieve would require a move through the 23.6% retracement at $95.31.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 4-hour chart
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.