WTI Price Forecast: Slips below $92.00 amid Iran diplomacy hopes; bullish potential intact
- WTI attracts some sellers during the Asian session, snapping a two-day winning streak.
- Easing supply concerns weigh on the commodity, though the downside seems limited.
- The bullish technical setup suggests that the path of least resistance is to the upside.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – extends the previous day's late pullback from the $95.80 area and drifts lower through the Asian session on Friday. The black liquid, for now, seems to have snapped a two-day winning streak and currently trades just below the $92.00 mark, down 2.0% for the day.
Median reports suggested that US and Iran negotiators are exploring a phased path out of the conflict that would involve Tehran reopening the Strait of Hormuz in exchange for Washington lifting its economic blockade of Iran. This, in turn, helps ease supply concerns and turns out to be a key factor exerting pressure on crude oil prices. That said, a Houthi missile attack on Saudi Arabia keeps geopolitical risks elevated and could act as a tailwind for the commodity.
From a technical perspective, crude oil prices maintain a constructive near-term tone above the 200-period Simple Moving Average (SMA) support on the 4-hour chart and the 38.2% Fibonacci retracement level of the July-September rally. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator turns positive with a rising histogram, suggesting improving bullish momentum even as the Relative Strength Index (RSI) hovers near a neutral 47.
Hence, any further slide is more likely to find decent support at the 200-period SMA, near $88.99, which is closely followed by the nearby 38.2% Fibo. retracement at $88.59. Deeper pullbacks could meet additional demand at the 50.0% level at $84.47 and progressively lower retracements toward $80.35, $74.48, and $67.01. On the topside, initial resistance aligns with the 23.6% Fibo. level at $93.68, where a clear break would open the way to further gains toward the recent cycle highs.
(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.
