WTI Price Forecast: Bulls retain control near one-month high, around $83.50 on Iran risks
- WTI spikes to an over one-month high on Monday in reaction to escalating US-Iran tensions.
- The closure of the Strait of Hormuz fuel supply concerns, lending support to the commodity.
- The bullish technical setup backs the case for an extension of the month-to-date recovery.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – kicks off the new week on a positive note and touches a fresh high since June 12, around the $84.40-$84.45 region, during the Asian session. Moreover, escalating US-Iran tensions and the closure of the Strait of Hormuz back the case for an extension of the recent recovery from a multi-month low, touched earlier this July.
From a technical perspective, last week's breakout through the 200-period Simple Moving Average (SMA) on the 4-hour chart and a subsequent move beyond the 38.2% Fibonacci retracement level of the May-July downfall favor bullish traders. Adding to this, momentum metrics maintain this constructive tone, with the Relative Strength Index (RSI) hovering in overbought territory near 76 and the Moving Average Convergence Divergence (MACD) remaining in positive territory. This suggests that upside pressure persists even as conditions look stretched.
Hence, some follow-through strength towards the 50.0% retracement, near $85.84, looks like a distinct possibility. A sustained break above this barrier would open the way toward the 61.8% Fibo. level at $90.28, ahead of higher Fibonacci caps at $96.59 and $104.64.
On the downside, initial support is located at the 38.2% retracement at $81.40, with deeper pullbacks potentially targeting the 23.6% retracement at $75.91 and the underlying 200-period SMA at $76.97. Meanwhile, the cycle low near $67.04 could act as a more distant structural floor.
(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.