WTI Price Forecast: Bounces off 38.2% Fibo. and retakes $93.00 as bullish bias persists
- WTI attracts some sellers on Thursday, snapping a five-day winning streak to an over two-week high.
- Persistent geopolitical uncertainties could act as a tailwind for the black liquid and help limit losses.
- The technical setup also warrants caution before placing aggressive bearish bets on the commodity.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – drifts lower during the Asian session on Thursday, extending the previous day's modest pullback from the vicinity of the $95.00 psychological mark, or an over two-week high. The commodity, however, bounce off the daily low and currently trades around the $93.25 region, down less than 1.0% for the day.
The downside for crude oil prices, however, remains cushioned amid persistent geopolitical uncertainties. In fact, Russia accused Ukraine of launching strikes against two domestic oil refineries and violating an energy ceasefire recently brokered by US President Donald Trump. Apart from this, escalating tensions between Saudi Arabia and Iran-backed Houthi rebels in Yemen, along with the US-Iran standoff over the Strait of Hormuz, should act as a tailwind for the black liquid, warranting caution for bears.
The overnight failure to build on strength beyond the 50% Fibonacci retracement level of the September-October slide warrants caution for bullish traders. The subsequent slide, however, stalls near the 38.2% Fibo level, making it prudent to wait for strong follow-through selling before confirming that the recent recovery from the monthly trough has run out of steam. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has slipped into negative territory, hinting at waning upside momentum.
However, the Relative Strength Index (RSI) around 54 stays in neutral ground, suggesting consolidation rather than a strong directional push. Hence, a convincing break below the 38.2% Fibo. retracement at $92.29 is needed to back the case for further losses to the 23.6% level at $90.02, while a deeper pullback would target the structural floor around $86.34. On the topside, immediate resistance emerges at the 50% retracement at $94.13, followed by the 61.8% level at $95.97, with higher barriers at $98.59 and the cycle high near $101.93.
(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.
