WTI Price Forecast: Slides further below $100.50; bullish potential seems intact
- WTI kicks off the new week on a weaker note amid hopes for easing hostilities in the Middle East.
- The geopolitical risk premium remains in play amid a standoff between Houthis and Saudi Arabia.
- The constructive technical setup backs the case for the emergence of dip-buying at lower levels.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – builds on the weekly bearish gap-down opening, retreating further from a five-month high touched on Friday. The commodity slides below mid-$100.00s during the Asian session, though the downside potential seems limited amid persistent geopolitical uncertainties.
US President Donald Trump on Sunday ruled out immediate military action against Iran. Adding to this, Trump earlier suggested that the US might need to finish the job or potentially reach a deal with Tehran amidst growing Iranian and Houthi threats against American interests in the region. This, in turn, fuels hopes about de-escalation of tensions in the Middle East and prompts some selling around crude oil prices at the start of a new week.
Meanwhile, an unnamed US official told an Israeli news channel that Trump was prepared to shift gears on Iran and that military strikes no longer appeared to be a question of if, but of when. Moreover, the Iran-backed Houthis in Yemen threatened on Sunday that they will keep attacking Saudi Arabia's King Khalid Airport in Riyadh. Moreover, stalled US-Iran talks keep the geopolitical risk premium in play and could support crude oil prices.
From a technical perspective, the black liquid retains a bullish near-term bias above the 50-period Simple Moving Average (SMA) on the 4-hour chart and the 23.6% Fibonacci retracement of the upswing from the monthly low. Moreover, the Moving Average Convergence Divergence (MACD) indicator hovers just above the zero line with a mildly positive reading, while the Relative Strength Index near 55 suggests steady upside momentum.
Hence, any subsequent fall could find initial support at the $99.30 area defined by the 23.6% Fibo. retracement, followed by the 50-period SMA near $97.83 and the 38.2% retracement at $96.84, which together form a broader demand cluster on pullbacks. On the topside, the immediate hurdle is the Fibonacci anchor around $103.29, and a sustained break above this level would open the way for an extension of the recent well-established bullish trend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 4-hour 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.
