WTI Price Forecast: Bulls retain control above $90.50, near July high amid Iran tensions

WTI attracts fresh buyers on Monday as US-Iran tensions keep the geopolitical risk premium in play.
Confrontations in the Strait of Hormuz fuel supply concerns and also lend support to the commodity.
The technical setup favors bullish traders and backs the case for a further near-term appreciation.

Haresh Menghani FXStreet

West Texas Intermediate (WTI) – the benchmark US Crude Oil price – kicks off the new week on a positive note amid escalating US-Iran confrontations in the Strait of Hormuz and climbs back above mid-$90.00s during the Asian session. The commodity is now trading within striking distance of its highest level since July 24, touched last Thursday, and seems poised to appreciate further.

In the latest developments surrounding the Middle East crisis, US forces struck three Iranian oil tankers on Saturday, while Iran's Islamic Revolutionary Guard Corps said it had targeted six vessels in retaliation. The tit-for-tat attacks have added to concerns over the security of shipping through the strategic waterway and intensified fears of a prolonged disruption to supplies from the region. This, in turn, validates the near-term positive outlook for crude oil prices.

From a technical perspective, WTI maintains a bullish bias above the 100-day Simple Moving Average (SMA) at roughly $85.21 and the 50% Fibonacci retracement of the April-July decline. Moreover, momentum indicators align with this upward stance, with the Relative Strength Index (14) hovering near 64 and the Moving Average Convergence Divergence (MACD) histogram expanding in positive territory, suggesting buyers retain control in the near term.

On the topside, immediate resistance emerges at the 61.8% Fibo. retracement near $91.73, with further barriers seen at the 78.6% level around $98.48 and then the recent swing high zone near $107.07. On the downside, initial support is reinforced by the 50% retracement at $86.99 and the 100-day SMA, ahead of a deeper Fibonacci floor near $82.26. As long as oil prices hold above this support band, pullbacks are likely to be viewed as corrective within the prevailing uptrend.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

WTI daily chart

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.

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