WTI Price Forecast: Oil supply tightness supports further upside above $90
- The Oil price trades close to its three-week high of $87.38 amid ongoing energy supply concerns.
- Both the US and Iran seem not interested in resuming talks regarding Hormuz reopening.
- US warns of economic consequences to nations for maintaining financial or commercial ties with Iran.
West Texas Intermediate (WTI), futures on NYMEX, trade flat near $86.00 during the European trading session on Friday, closer to its over three-week high of $87.38 posted the previous day. Oil prices remain firm as the global energy supply remains squeezed due to the closure of the Strait of Hormuz and the Bab el-Mandeb Strait, which together account for 27% of global energy supply.
Energy prices seem unlikely to retreat in the near term amid the absence of efforts from both the United States (US) and Iran to resume talks regarding the reopening of the Hormuz.
Meanwhile, tensions between the US and Iran are expected to remain escalated as President Donald Trump has warned of isolating Iran from the global financial system, and has also threatened severe economic consequences to other nations in case they support Iran.
Analysts at Danske Bank note that the latest US rhetoric on Iran has sharpened significantly, with President Trump warning of "severe consequences" for countries that maintain financial or commercial ties with Tehran. Treasury Secretary Scott Bessent reinforced the message, stating that the US intends to impose the "toughest sanctions in history".
According to Danske Bank, Bessent also suggested that a stronger sanctions push could actually "reduce the likelihood of a renewed large-scale military escalation" and argued that oil markets are "misinterpreting the message", potentially overstating the risk of a further geopolitical flare-up.
WTI Technical Analysis
In the daily chart, WTI US Oil trades at $85.74, maintaining a bullish near-term bias as price holds above the 20-day exponential moving average (EMA) at $82.03. The positioning of spot above this short-term trend indicator suggests underlying demand remains in control, while the Relative Strength Index (14) at 58.54 stays in positive territory without yet signalling overbought conditions, hinting that the latest advance could still have room to run.
On the downside, immediate support is seen at the 20-day EMA around $82.03, if broken lower, it would point to a deeper corrective phase. As long as WTI holds above the $82.03 zone, the technical picture favours further consolidation with an upside bias, while a clear daily close below this support would weaken the current constructive structure.
Looking up, the oil price is expected to extend its advance towards the two-month high at $92.25.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
