WTI Price Forecast: Hangs near four-week low, around $89.00 as bears seem noncommittal
- WTI drifts lower for the second straight day on Monday amid easing supply concerns.
- Persistent geopolitical uncertainties help the black liquid hold above a four-week low.
- The technical setup warrants caution before positioning for any further depreciation.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts sellers for the second straight day on Monday and sticks to its intraday losses around the $89.00 mark through the early European session. The commodity remains close to a four-week low, touched last Friday, amid easing supply concerns, though heightened geopolitical tensions help limit losses.
The G7 agreed on Friday to release 100 million barrels of crude and fuel products from emergency reserves. Furthermore, Middle Eastern crude exports rose above pre-war levels on four days during the final week of September, exerting some pressure on the black liquid. That said, flows through the Strait of Hormuz remain amid the US-Iran standoff, which, along with the widening Russia-Ukraine war, might hold back bears from positioning for any further depreciating move in crude oil prices.
From a technical perspective, the commodity needs to find acceptance below the 38.2% Fibonacci retracement of the July-September upswing to back the case for further losses towards testing sub-$88.00 levels. Any further decline, however, is more likely to attract fresh buyers and find decent support near the $85.00-$84.50 confluence – comprising the 50% retracement level and the 100-day Simple Moving Average (SMA). The said area would act as a pivotal point for crude oil prices amid mixed oscillators.
The Moving Average Convergence Divergence (MACD) stays below zero with a negative reading of -0.93 and the Relative Strength Index (RSI) hovers near a neutral 47, hinting at a moderating but still supportive trend rather than a decisive reversal. A convincing break below $84.50, however, should pave the way for a further downfall towards the 61.8% retracement at $80.73 and the 78.6% level at $74.84, ahead of the broader structural anchor down at $67.33.
On the topside, a break higher would first target resistance at the 23.6% Fibo. retracement at $94.13, with a subsequent extension opening the way toward the cycle high region around $102.40.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily chart
WTI Oil FAQs
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.
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.
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.
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.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
