WTI Price Forecast: Bulls await sustained move above $78.00 amid supply concerns
- WTI gains positive traction on Monday amid supply concerns due to the Middle East conflict.
- The technical setup favors bulls and backs the case for a further intraday appreciating move.
- A convincing break below the 200-SMA/50% Fibo. is needed to negate the positive outlook.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – kicks off the new week on a positive note amid the US-Iran standoff over the reopening of the Strait of Hormuz. The black liquid touches a four-day high during the Asian session, with bulls now awaiting acceptance above the $78.00 mark before positioning for any further gains.
Iran stated that talks with Oman to establish a safe shipping route through the Strait of Hormuz are nearing an agreement. Iran, however, reiterated conditions for a full reopening of the waterway, including an end to the US naval blockade, the removal of sanctions and compensation for war damage. Moreover, Iran-backed Houthi militants in Yemen claimed a recent attack on Saudi Arabia’s Jazan refinery, keeping the geopolitical risk premium in play and supporting crude oil prices.
From a technical perspective, crude oil prices hold a modest bullish bias above the 200-period Simple Moving Average (SMA) at $76.80 and the 61.8% Fibonacci retracement level of the July upswing, at $76.42. Moreover, the Relative Strength Index (RSI) sits slightly above the midline near 54, while the Moving Average Convergence Divergence (MACD) remains in positive territory. Momentum indicators together suggest that upside momentum is present but not yet overstretched.
Meanwhile, any subsequent move up might confront initial resistance at the 50% retracement at $79.43, with further barriers seen at the 38.2% level around $82.43 and the 23.6% retracement near $86.15 if buyers extend the advance. On the downside, the 200-period SMA at $76.80 offers the first layer of support ahead of the 61.8% retracement at $76.42. A convincing break below this confluence support would weaken the current constructive tone and expose bigger corrective risk.
(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.
