WTI Price Forecast: Retakes $88.00 as Strait of Hormuz closure fuel supply disruption fears
- WTI attracts fresh buyers and reverses a part of the previous day’s sharp retracement slide.
- The closure of the Strait of Hormuz fuel supply concerns, lending support to the commodity.
- The technical setup seems tilted in favor of bulls and backs the case for further appreciation.
West Texas Intermediate (WTI) Crude Oil prices regain positive traction following the previous day's dramatic turnaround from the highest level since June 2022 and climb back above the $88.00 mark during the Asian session on Tuesday. The ongoing war in the Middle East and the closure of the Strait of Hormuz raise concerns about a major disruption to global fuel supplies, lending some support to the black liquid.
Meanwhile, the International Energy Agency (IEA) is reportedly discussing a coordinated release of emergency oil reserves among member countries to stabilize markets. Furthermore, the Trump administration announced a $20 billion reinsurance program aimed at reviving shipping in the Strait of Hormuz. This, however, does little to ease market worries, suggesting that the path of least resistance for Crude Oil prices is to the upside.
From a technical perspective, Monday's sharp intraday decline stalled ahead of the 200-hour Exponential Moving Average (EMA), which is currently pegged near the $78.85 region and should act as a key pivotal point. The Moving Average Convergence Divergence (MACD) indicator rises toward the zero line after a deep negative phase, with the histogram contracting, which suggests fading bearish momentum and scope for further recovery.
The Relative Strength Index at 45.33 emerges from oversold territory and edges toward the midline, reinforcing improving intraday buying pressure without signaling overbought conditions. Immediate support aligns at $86.85, with a break below exposing the $84.70 area where recent hourly lows concentrate above the rising 200-hour EMA. A deeper slide would bring $83.00 into focus as a stronger downside pivot within the broader uptrend.
On the topside, initial resistance appears at $89.00, followed by $91.00, where prior congestion could slow advances. A sustained move above $91.00 would open the path toward $96.80 as the next upside target within the ongoing recovery phase. Nevertheless, the near-term bias turns cautiously bullish as Crude Oil prices extend well above the 200-hour EMA, which keeps the broader trend pointed higher despite the recent correction from the $112 area.
(The technical analysis of this story was written with the help of an AI tool.)
WTI 1-hour 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.
