WTI Price Forecast: Bulls await acceptance above $90.00 and 61.8% Fibo. amid Iran risks
- WTI sticks to a bullish bias as US-Iran tensions keep the geopolitical risk premium in play.
- Clashes over the Strait of Hormuz fuel supply concerns and also support the black liquid.
- The technical setup backs the case for an extension of an over one-week-old uptrend.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – trades below the $90.00 mark during the Asian session on Friday and remains close to its highest level since July 24, touched earlier this week. The commodity remains on track to register its steepest weekly gains since mid-July amid renewed US-Iran hostilities and supply concerns due to clashes over the Strait of Hormuz.
In further developments surrounding the Middle East crisis, Iran targeted US military bases in Kuwait and the United Arab Emirates (UAE) on Thursday. Meanwhile, South Korea is reportedly preparing to deploy military assets to support freedom of navigation in the strategic Strait of Hormuz and aims to dispatch them before the end of the year. This keeps the geopolitical risk premium in play and validates the near-term positive outlook for crude oil prices.
Even from a technical perspective, the near-term bias stays bullish as the black liquid holds above the 50% Fibonacci retracement level of the April-July decline and the 100-day Simple Moving Average (SMA). Moreover, constructive momentum indicators suggest a firm underlying floor after the latest advance. The Relative Strength Index (14) is hovering near 63, while the Moving Average Convergence Divergence (MACD) line remains in positive territory.
This, in turn, hints that buyers retain the upper hand even as conditions edge toward overbought. However, a move beyond the initial hurdle near the 61.8% Fibo. retracement at $92.01 is needed to back the case for additional gains towards the next barrier near $98.76 at the 78.6% retracement. A sustained break higher would expose the prior swing high around $107.36.
On the downside, immediate support comes at the 50% retracement at $87.26, followed by the 100-day SMA near $85.17. A deeper pullback would find additional demand around $82.52 and then $76.65, where lower Fibonacci levels converge to reinforce the broader uptrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily 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.