WTI Price Forecast: RSI points lower as prices remain below key SMAs
- WTI recovers from its lowest level since April 17 as traders await clarity on a possible US-Iran agreement.
- Iran says the proposed agreement does not require Tehran to transfer control of the Strait of Hormuz.
- Technically, WTI's near-term tone remains bearish, with RSI signaling weak upside momentum.
West Texas Intermediate (WTI) pares some part of earlier losses on Friday as markets seek confirmation of a possible US-Iran agreement, prompting traders to refrain from placing aggressive bearish bets.
At the time of writing, WTI trades around $83.80 per barrel after recovering from an intraday low of $81.80, its lowest level since April 17.
Crude Oil prices came under heavy selling pressure on Thursday after US President Donald Trump said the US and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz, a critical chokepoint for around 20% of global Oil flows.
However, questions remain over the future management of the Strait of Hormuz. According to IRNA, "the future administration of the Strait will be resolved as a regional matter through dialogue and joint decision-making between Tehran and Oman."
IRNA also reported that the proposed agreement with the United States does not require Iran to transfer control of the strategic waterway.
Until the details of any agreement become clearer, a geopolitical risk premium is likely to remain embedded in Oil prices. However, the technical outlook remains fragile, with prices trading below key moving averages and momentum indicators pointing lower.
Technical analysis:
WTI retains a bearish near-term bias, with price holding below the 100-, 50- and 21-day simple moving averages (SMAs) clustered between roughly $85 and $94, which cap any recovery attempts for now.
The Relative Strength Index (RSI) on the daily chart is near 39 and keeps a downside bias in momentum, while the subdued Average Directional Index (ADX) around 14 hints at a weak directional trend.
On the topside, initial resistance is seen at the 100-day SMA at $85.23, with further barriers at the 21-day SMA near $92.17 and the 50-day SMA around $93.70, where sellers would likely re-emerge if a bounce extends.
On the downside, immediate support is seen at the $80 psychological mark near the lower end of the war-driven trading range, followed by the 200-day SMA at $72.49.
(The technical analysis of this story was written with the help of an AI tool.)
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.
