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WTI Price Forecast: Short-term momentum improves above 21-day SMA
WTI eases on Friday after rallying nearly 4% the previous day as markets reassess US oversight of Venezuelan Oil. US President Donald Trump signals potential $100 billion investment in Venezuela’s Oil sector, reviving oversupply concerns. Technically, near-term momentum improves, but the longer-term trend remains fragile.
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EUR/USD deflates to fresh lows, targets 1.1600
The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.
GBP/USD breaks below 1.3400, challenges the 200-day SMA
GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.
Japanese Yen weakens further; USD/JPY hits multi-week top on firmer USD ahead of US NFP
The Japanese Yen adds to its intraday losses through the first half of the European session amid the uncertainty over the timing of the next interest rate cut by the Bank of Japan and escalating China-Japan row. This, along with worries that consumption momentum could fade if inflation continues to outpace wage growth in early 2026, overshadows an unexpected rise in Japan's Household Spending data for November.
Gold flirts with yearly tops around $4,500
Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.
WTI Price Forecast: Short-term momentum improves above 21-day SMA
WTI eases on Friday after rallying nearly 4% the previous day as markets reassess US oversight of Venezuelan Oil. US President Donald Trump signals potential $100 billion investment in Venezuela’s Oil sector, reviving oversupply concerns. Technically, near-term momentum improves, but the longer-term trend remains fragile.
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About Oil
Oil Highlights
Crude oil, commonly known as petroleum, is a naturally occurring fossil fuel liquid composed of hydrocarbon underground deposits and organic materials. Its prices are typically measured in US Dollars (USD).
The top oil-producing countries include Saudi Arabia, Russia, the United States, Iran, and China, while the largest consumers are the United States, China, Japan, Russia, and Germany.
Crude oil is classified into various grades according to density (heavy versus light) and sulfur content (sour versus sweet). Lighter and sweeter crude commands higher prices because refiners can produce a greater yield of high-quality refined products from it.
Density is measured by API gravity, a scale developed to compare the density of petroleum to water. An API greater than 10 means the liquid floats on water. In general, crude Oils with API values between 40 and 45 degrees have the highest commercial value.
Sulfur content determines the quality of crude Oil. Crude with high sulfur content (sour crude) is less pure and sells cheaper compared to crude with low sulfur content (sweet crude).
Major benchmarks
There are two main benchmarks for pricing crude Oil: West Texas Intermediate (WTI) from the United States (US) and Brent from the United Kingdom (UK).
WTI Crude
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”.
Most WTI crude Oil is refined in the Midwest and the Gulf Coast regions of the US.
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, are 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.
WTI serves as a benchmark in Oil pricing and is the underlying commodity of NYMEX Oil futures contracts.
Brent
Brent Crude Oil is a type of Crude Oil found in the North Sea that is used as a benchmark for international Oil prices. It is considered “light” and “sweet” because of its high gravity and low sulfur content, making it easier to refine into gasoline and other high-value products. Brent Crude Oil serves as a reference price for approximately two-thirds of the world's internationally traded Oil supplies. Its popularity rests on its availability and stability: the North Sea region has well-established infrastructure for Oil production and transportation, ensuring a reliable and consistent supply.
Brent crude is a blend from 15 different oil fields in the North Sea. It has an API gravity of 38.3 degrees and a sulfur content of around 0.37%, making it heavier and less sweet than WTI crude. Brent is suitable for the refinery of gasoline and middle distillates.
Originally traded on the International Petroleum Exchange in London, Brent crude futures have been listed on the Intercontinental Exchange (ICE) since 2005.
Oil and USD/CAD Correlation
The special relationship between Oil and the Loonie
Canada is among the world's largest Oil producers and it exports crude primarily to the US. This trade relationship directly impacts the Canadian Dollar (CAD), popularly known as the Loonie. Since Canadian dollars are needed to purchase and move Oil across the border, the fluctuation in Oil prices has a direct impact on the USD/CAD pair.
When Oil prices decline, the demand for the Loonie often weakens, causing USD/CAD to rise. Conversely, higher Oil prices frequently lead to CAD strength and a drop in the pair.
Oil prices are a significant factor influencing the Loonie’s price action, alongside risk sentiment and economic fundamentals. If you are trading USD/CAD, monitoring Oil charts can provide crucial insights.