WTI Price Forecast: Inches closer to $100 amid fears of US blockade extension on Iran
- The Oil price jumps above $99.00 as US President Trump aims to extend the Iranian blockade.
- Prolonged Hormuz closure keeps oil prices higher.
- The UAE announces its decision to quit the OPEC and OPEC+.
West Texas Intermediate (WTI), futures on NYMEX, trades 1.7% higher at around $99.20 during the European trading session on Wednesday. The Oil price gains after comments from United States (US) officials that President Donald Trump has instructed aides to prepare for an extended blockade of Iran, The Wall Street Journal (WSJ) reported on Wednesday.
The US blockaded Iranian sea ports, a part of retaliation against Tehran, for keeping the Strait of Hormuz closed, a vital passage to almost 20% of global energy supply.
The WSJ report has also shown that US President Trump opted to continue squeezing Iran’s economy and oil exports by preventing shipping to and from its ports rather than resuming military actions.
Longer the Strait of Hormuz will remain closed, higher will be supply crisis, which will keep energy prices elevated.
Meanwhile, the UAE has announced a decision to quit the OPEC and OPEC+, aiming to focus on “national interests”, at times when the Middle East war has resulted in a global energy shock.
Going forward, investors will focus on the Federal Reserve’s (Fed) monetary policy announced at 18:00 GMT, in which the US central bank is expected to leave interest rates unchanged in the range of 3.50%-3.75%.
WTI technical analysis
WTI US Oil trades higher at around $99.20, holding a constructive bullish bias as it remains well above the 20-day Exponential Moving Average (EMA) at roughly $92.94.
The Relative Strength Index (RSI) around 60 hints at firm but not overextended upside momentum.
On the topside, initial resistance emerges at the downward-sloping trendline near $100.89, where a clear daily close higher would open the way for a retest of the April 6 high at 106.44. Looking down, the 20-day EMA at about $92.94 offers the first layer of dynamic support, and a drop back below this average would indicate that bullish pressure is fading and that the recent breakout is at risk of reversing, which could expose the price to the April 22 low around $87, followed by the April 17 low at $78.88.
(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.
