WTI Price Analysis: Bullish Flag breakout backs fresh upside move ahead
- The Oil price trades lower as the US Dollar gains ahead of the US markets' opening.
- Investors await the outcome of US-Iran nuclear talks, scheduled on Thursday.
- WTI holds the Bullish Flag breakout and aims to resume its rally towards the $70s.
West Texas Intermediate (WTI), futures on NYMEX, are down 0.3% to near $66.20 during the European trading session on Tuesday. The Oil price is slightly under pressure, but is still close to its over six-month high of $67.23.
A higher US Dollar (USD) is expected to have weighed on the oil price. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, is up 0.15% higher to near 97.85 ahead of the United States (US) markets opening
The oil price is broadly firm amid tensions between the US and Iran over Tehran’s nuclear plans. Washington wants Iran to drop its intentions of building nuclear facilities, but the latter refuses to do so. US President Donald Trump has also warned of military action in Tehran if it doesn’t give up its nuclear programme plans.
US President Trump threatened Tehran through a post on Truth.Social on Monday that it will be a very bad day for the country and its people if they don’t reach a deal.
For fresh cues on the Oil price outlook, investors await the second round of US-Iran talks, which are scheduled for Thursday. Signs of tensions escalating between the two nations would prompt oil prices, assuming that Tehran would initiate disrupting oil supply through the Strait of Hormuz. On the contrary, a deal confirmation between the two would weigh on the oil price.
WTI Technical Analysis
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WTI US OIL trades lower at around $66.30 as of writing. However, the near-term bias is mildly bullish as price holds the breakout of the Bullish Flag chart pattern that capped action between roughly $61.30 and $64.90.
The price also holds above the 20-day Exponential Moving Average near $64.00, which is tracking higher and reinforces an improving short-term trend backdrop.
A fresh break above 60.00 on the 14-day Relative Strength Index (RSI) suggests buyers retain control, though with measured strength rather than a sprint.
Initial support emerges at the former channel top near $64.90, where a pullback would test whether the recent breakout can hold. Below that, the 20-day EMA around $64.00 offers secondary support, with the broader rising trend line from about $55.50 underpinning the structure on deeper weakness.
On the upside, immediate resistance is anticipated near $68.00, where the latest advance would start to look stretched against recent ranges. A decisive break above that area would open the way toward the low $70s, while failure to hold above $64.90 would temper the current bullish bias and point back toward the $62.00 area.
(The technical analysis of this story was written with the help of an AI tool.)
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
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
