WTI Price Forecast: Flat lines below $87.50 as bears await 100-day SMA breakdown
- WTI edges higher as renewed hostilities between the US and Iran keep geopolitical risks in play.
- The lack of follow-through buying warrants caution before positioning for any meaningful gains.
- A sustained break below the 100-day SMA is needed to back the case for further depreciation.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – struggles to capitalize on a modest Asian session uptick and currently trades just below mid-$87.00s, nearly unchanged for the day.
Renewed hostilities between the US and Iran temper hopes for a deal to end the over three-month-old war. This, along with the effective closure of the Strait of Hormuz, acts as a tailwind for Crude Oil prices. The commodity remains close to a nearly two-month low touched on Tuesday as traders assess fresh developments surrounding the Middle East crisis and keenly await the release of the US consumer inflation figures.
The black liquid holds above the 100-day Simple Moving Average (SMA), suggesting that the broader near-term tone remains constructive despite the recent pullback. However, soft momentum indicators hint that recovery attempts may struggle to gain strong traction without fresh buying interest. In fact, the Relative Strength Index is near 42, and the Moving Average Convergence Divergence (MACD) is in negative territory.
Hence, it will be prudent to wait for a sustained break and acceptance below the 100-day SMA at $84.72 before positioning for an extension of the recent downfall from the vicinity of the $100 psychological mark. A clear break beneath the said support would likely expose deeper corrective potential toward sub-$79.00 levels, or the April swing low.
On the topside, the immediate strong resistance is defined primarily by recent price extremes, with the psychological $90 handle followed by the late-September highs near $103 acting as reference points for any sustained rebound.
(The technical analysis of this story was written with the help of an AI tool.)
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.
