WTI Price Forecast: Extends advance to near $98 amid fears of prolonged Hormuz closure
- The Oil price jumps to near $98.00 amid renewed US-Iran tensions.
- US President Trump said that the ceasefire with Iran is on life support.
- Investors await the US inflation data for fresh cues on the Fed’s monetary policy outlook.
West Texas Intermediate (WTI), futures on NYMEX, is 2.6% higher to near $98.00 during the European trading session on Tuesday. The oil price gains sharply amid growing doubts that the temporary ceasefire between the United States (US) and Iran, announced in early April, would last long.
Tensions between the US and Iran have renewed as US President Donald Trump stated, on Monday, that Iran’s proposal was “stupid”, adding, “Ceasefire is on life support.”
The renewed uncertainty over the US-Iran permanent resolution has prompted fears of a prolonged closure of the Strait of Hormuz, a vital passage to almost 20% of global energy supply.
Meanwhile, investors await the US Consumer Price Index (CPI) data for April, which will be published at 12:30 GMT. Investors will pay close attention to the US inflation to get fresh cues on the Federal Reserve’s (Fed) interest rate outlook.
The US CPI report is expected to show that the headline inflation rose to 3.7% Year-on-Year (YoY) from 3.3% in March.
WTI technical analysis
WTI US Oil trades higher at around $98.00, maintaining a constructive near-term bias as it holds above the 20-day Exponential Moving Average (EMA) at roughly $95.54. The price location above this dynamic support suggests that dips remain supported, while the Relative Strength Index (RSI) around 54 keeps a modestly positive tone without yet venturing into overbought territory.
On the downside, initial support is seen at the 20-day EMA near $95.54, where a break would hint at a deeper corrective phase toward $90.00. Looking up, the psychological level of $100 will be the key resistance zone, followed by the April 30 high of $107.35.
(The technical analysis of this story was written with the help of an AI tool.)
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
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
