WTI Price Forecast: Bears have the upper hand below 23.6% Fibo. and 200-hour SMA
- WTI struggles to capitalize on the previous day’s move higher amid mixed fundamental cues.
- Hopes for a Russia-Ukraine ceasefire and higher output act as a headwind for the commodity.
- Middle East uncertainties support the black liquid, though the technical setup favors bears.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – edges lower during the Asian session on Friday, though it lacks follow-through as traders await further developments surrounding the Middle East crisis.
Investors remain hopeful about potential behind-the-scenes efforts to secure a ceasefire between Russia and Ukraine. Moreover, reduced risks of further escalation of Middle East tensions ahead of the US-China summit next week fail to assist the black liquid to capitalize on the previous day's positive move. In fact, US officials recently downplayed the need for further military strikes against Iran. Adding to this, higher OPEC+ output, along with increased production from Saudi Arabia and Iraq, contributes to capping crude oil prices.
However, the geopolitical risk premium is back in play after US President Donald Trump issued a fresh warning to Iran, saying that those responsible for any attack on American officials would no longer exist. Moreover, attacks on Saudi Arabia's energy infrastructure and the US-Iran standoff over the Strait of Hormuz act as a tailwind for crude oil prices. In fact, Mohammad Bagher Ghalibaf, Iran's parliament speaker and top negotiator, stated that the critical waterway will never return to its status prior to the US-Israel war on Iran.
From a technical perspective, the black liquid stays under the 23.6% Fibonacci retracement at $88.04 and the 200-hour Simple Moving Average (SMA) near $89.18. Moreover, momentum indicators suggest that upside attempts could continue to struggle beneath the overhead resistance levels, which reinforces a bearish near-term bias. In fact, the Relative Strength Index (RSI) at 60.75 suggests mildly constructive momentum, while the Moving Average Convergence Divergence (MACD) is flattening just below the zero line.
Meanwhile, initial resistance is seen at the 23.6% Fibo. retracement at $88.04, followed by the 200-period SMA at $89.18, with deeper barriers aligning at the 38.2% level around $91.11 and the 50.0% level at $93.60. On the downside, the primary structural support is the cycle low anchor around $83.06. A break below this zone would likely reinforce the current bearish bias, while sustained trading above $87.00 but below $88.04 would keep crude oil prices confined in a consolidative, downside-skewed range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 1-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.
