WTI Price Forecast: Climbs above $86.00 as 100-day SMA breakout comes into play
- WTI gains follow-through positive traction on Tuesday as US-Iran tensions fuel supply concerns.
- The technical setup favors bulls and backs the case for a further near-term appreciating move.
- A convincing break below the 38.2% Fibo. near $82.60 is needed to negate the positive outlook.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts buyers for the second straight day on Tuesday as escalating US-Iran tensions and the standoff over the Strait of Hormuz continue to fuel supply concerns. The commodity is now looking to build on the momentum beyond the 100-day Simple Moving Average (SMA) and the $86.00 mark amid the supportive fundamental backdrop.
US forces struck two rocket launchers on Iran’s Larak Island in the Strait of Hormuz on Sunday. This was the first US strike since late July, prompting an Iranian counterattack on American air bases in Jordan. Moreover, US President Donald Trump warned that further military action remained possible and threatened to hit Iran "hard". This keeps the geopolitical risk premium in play, which might continue to support crude oil prices.
From a technical perspective, the black liquid holds comfortably above the 38.2% Fibo. retracement at $82.60. Moreover, the Moving Average Convergence Divergence (MACD) stays marginally positive, and the Relative Strength Index (RSI) near 58 suggests underlying buying interest rather than exhaustion. This suggests that buyers still control the broader trend despite the recent consolidation below higher retracement levels.
Meanwhile, immediate resistance is pegged at the 50.0% retracement at $87.30, followed by a more substantial barrier at the 61.8% level at $92.01. A daily close above $87.30 would open the way for a test of $98.71 and $107.25 higher retracement hurdles. On the downside, immediate support is provided by the 100-day SMA at $85.07, with additional structural cushions at the 38.2% retracement at $82.60 and deeper levels at $76.77 and $67.36 should a broader correction unfold.
(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.