WTI Price Forecast: Retreats from one-month top; slides below $97.50 but uptrend holds
- WTI attracts some sellers on Monday, snapping a seven-day winning streak to a one-month high.
- Escalating Middle East tensions and the Hormuz standoff could help limit losses for the commodity.
- The bullish technical setup backs the case for the emergence of some dip-buying at lower levels.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – kicks off the new week on a weaker note, eroding a part of Friday's strong gains to the $99.25-$99.30 region, or a one-month high. The commodity slides back below mid-$97.00s during the Asian session amid hope of improving supplies after US President Donald Trump signed an order waiving most sanctions and tariffs on Russia. However, escalating Middle East hostilities and conflicts in the Strait of Hormuz could limit deeper losses for the black liquid.
Three tankers were also damaged in the Strait of Hormuz over the weekend as Iran’s IRGC navy maintained that the waterway remained closed and vessels could pass only with its authorization. Moreover, a secretary of Iran’s Supreme National Security Council, Mohsen Rezaei, warned that Tehran has prepared a new retaliation plan for any renewed US-Israeli attack. Adding to this, Ukraine launched more than 1,000 drones at Russia on Sunday in one of the war’s largest aerial assaults, sparking fires at an oil export terminal and a storage depot in St. Petersburg.
Furthermore, clashes between Saudi Arabia and the Iran-backed Houthi rebel group in Yemen have shown little sign of abating. This keeps the geopolitical risk premium firmly in play and might continue to act as a tailwind for crude oil prices, making it prudent to wait for strong follow-through selling before confirming that the recent move up witnessed over the past three weeks or so has run out of steam.
From a technical perspective, crude oil prices maintain a constructive bullish bias above the 100-period simple moving average (SMA) on the 4-hour chart, and all referenced Fibonacci retracement levels. Meanwhile, the Relative Strength Index (RSI) is hovering in bullish territory around 63, while the Moving Average Convergence Divergence (MACD) stays marginally positive. Momentum indicators together suggest that upside pressure is intact even as short-term overbought conditions begin to moderate.
Meanwhile, any subsequent slide could find initial support at the 23.6% Fibo. retracement at $96.25, followed by a deeper cushion at the 38.2% level near $94.37 and the 50% retracement around $92.85. Furthermore, the 100-period SMA reinforces the broader demand zone above the 61.8% retracement at $91.33.
On the topside, the next notable resistance emerges at the Fibonacci swing high around $99.29, and a sustained break above that level would open the door for an extension of the current bullish phase, while a drop below $96.25 would signal a corrective pullback toward the mid-$90s.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 4-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.
