WTI Price Forecast: Advances to four-week top, near $80.00 on Hormuz supply risks
- WTI attracts follow-through buyers for the second straight day amid escalating US-Iran tensions.
- Supply disruptions in the Strait of Hormuz further support the commodity amid a bullish setup.
- Any corrective decline to the 200-day EMA and the 23.6% Fibo. level is likely to be bought into.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – is seen building on the previous day's strong move up and gaining positive traction for the second consecutive day on Tuesday. The momentum lifts the commodity to a nearly one-month top, around the $80.00/barrel mark during the Asian session, and is sponsored by renewed supply concerns due to escalating US-Iran tensions.
The US military launched a third straight night of strikes against Iran after President Donald Trump reimposed a naval blockade of Iranian ports on Monday. In response, Iran's Islamic Revolutionary Guard Corps (IRGC) targeted US facilities in the region, while two UAE tankers were hit by Iranian cruise missiles in the Strait of Hormuz. Traders were quick to price in the geopolitical risk premium, which, in turn, acts as a tailwind for Crude Oil prices and backs the case for an extension of the recent recovery from the lowest level since late February.
From a technical perspective, the overnight breakout through the 23.6% Fibonacci retracement level of the April-July downfall and the 200-day Exponential Moving Average (EMA) were seen as a key trigger for bullish traders. Adding to this, the Moving Average Convergence Divergence (MACD) indicator has turned firmly positive, with the line advancing above zero. Moreover, the Relative Strength Index (RSI) at 55.10 suggests constructive but not overextended momentum, hinting that buyers remain in control while leaving room for further gains.
On the topside, immediate resistance is seen at the 38.2% Fibo. retracement at $82.20, followed by the 50% level at $86.88 and the 61.8% retracement at $91.55, where rallies could meet stronger supply. Bulls, however, might opt to wait for the release of the US consumer inflation figures and US Federal Reserve (Fed) Chair Kevin Warsh’s testimony before placing fresh bets. In the meantime, initial support aligns near the 200-day EMA at $77.24, ahead of the 23.6% retracement at $76.41, with a deeper corrective slide only exposing the structural floor around $67.06.
(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.
