WTI Price Forecast: Bulls seem hesitant near $89.00 amid easing supply risks
- WTI stages a modest bounce from the vicinity of a four-week low, though it lacks bullish conviction.
- Easing supply concerns counter geopolitical uncertainties and cap the upside for the black liquid.
- The mixed technical setup warrants caution before placing directional bets around the commodity.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – edges higher during the Asian session on Tuesday, reclaiming the $89.00 mark and snapping a two-day winning streak. The black liquid, however, remains close to a four-week low, touched last Friday, amid mixed fundamental cues.
The geopolitical risk premium remains in play amid the risk of a further escalation of tensions in the Middle East, which, in turn, offers some support to crude oil prices. That said, resilient Middle Eastern crude exports, along with a G7 emergency stockpile release, have eased supply concerns and might cap any meaningful upside for the commodity.
From a technical perspective, crude oil prices now seem to have found acceptance below the 200-period Simple Moving Average (SMA) on the 4-hour chart. However, some follow-through weakness below the 38.2% Fibonacci retracement of the July-September upswing is needed to back the case for further losses amid mixed oscillators on the said chart.
The Moving Average Convergence Divergence (MACD) indicator remains marginally negative, and the Relative Strength Index (RSI) around 46 hints at subdued, consolidative momentum rather than a decisive recovery. Hence, the 200-period SMA at $90.60 might continue to act as an immediate hurdle ahead of the 23.6% Fibo. retracement at $93.62.
The cycle high anchor near $101.85 marks a distant bullish objective that is unlikely to be challenged unless crude oil prices can reclaim and hold above the intermediate resistance band. Meanwhile, immediate support is located at the 38.2% retracement at $88.52, with deeper levels at the 50.0% level near $84.40 and the 61.8% Fibo. at $80.29 if selling pressure extends.
(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.
