WTI Price Forecast: Eyes further losses near $88.50, two-week low amid easing supply risk
- WTI attracts sellers for the fifth straight day amid hopes for Iran diplomacy and easing supply concerns.
- offered to unblock the Strait of Hormuz as Saudi Arabia works to restore operations on an oil pipeline.
- The mixed technical setup warrants some caution for bearish traders and positioning for further losses.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – retains a negative bias for the fifth straight day on Wednesday, flirting with an over two-week low touched on Tuesday. The commodity trades near mid-$88.00s during the Asian session, down over 1% for the day, and seems vulnerable to slide further.
As Saudi Arabia works to restore operations on an oil pipeline to the Red Sea, hopes for a diplomatic resolution to end the US-Iran war and the reopening of the Strait of Hormuz help ease supply concerns. In fact, Iran reportedly offered to unblock the strategic waterway in return for a US military de-escalation. This adds to the optimism and continues to weigh on oil prices.
Meanwhile, US President Donald Trump told the UNGA that he faces a big decision on whether to make a deal with Iran or "annihilate" the Islamic Republic if the conflict went unresolved. Furthermore, tighter US sanctions intended to cripple Iranian aviation come into force on Wednesday, keeping the geopolitical risk premium in place and limiting losses for crude oil prices.
From a technical perspective, the black liquid is approaching the 50.0% Fibonacci retracement at $87.87, but holds comfortably above the 100-day simple moving average (SMA) at $84.97. This suggests that the near-term tone is neutral to slightly capped, though the broader uptrend framework remains intact. However, daily oscillators point to waning bullish momentum.
The Moving Average Convergence Divergence (MACD) has slipped deeper into negative territory, while the Relative Strength Index (RSI) at 46.8 has retreated below the midline. Hence, a break below the 50% Fibo. would expose the first line of support at $87.87, followed by a cluster of underlying demand around the 100-day SMA at $84.97 and the 61.8% Fibo. at $84.52.
A deeper pullback would make the commodity vulnerable to test the 78.6% level at $79.75 and the broader cycle floor near $73.67. On the topside, initial resistance emerges at the 38.2% Fibo. retracement at $91.23, ahead of a stronger barrier at the 23.6% retracement near $95.37, with the cycle high region around $102.07 marking a more distant cap.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily 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.
