WTI Price Forecast: Seems vulnerable near mid-97.00s; break below 38.2% Fibo. awaited
- WTI drifts lower for the second straight day amid the optimism over a potential US-Iran peace deal.
- The overnight breakdown below the 200-hour SMA backs the case for a further depreciating move.
- Bearish traders now await a sustained break below the $38.2% Fibo. level before placing fresh bets.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts some follow-through sellers for the second straight day and drops to a one-week low during the Asian session on Wednesday. The commodity currently trades near mid-$97.00s, down nearly 2.5% for the day, and seems vulnerable to extend the recent pullback from a nearly four-week high, touched last Thursday.
US President Donald Trump said that ‘Project Freedom’ – aimed at restoring commercial shipping traffic through the Strait of Hormuz – will be paused for a short period of time to see if an agreement with Iran can be finalised. Furthermore, US Defense Secretary Pete Hegseth said that the US-Iran ceasefire holds for now and that the US was not seeking to re-escalate tensions with Tehran. This, in turn, fuels hopes for a US-Iran peace deal and turns out to be a key factor exerting pressure on Crude Oil prices.
From a technical perspective, the overnight breakdown below the 200-hour Simple Moving Average (SMA) was seen as a key trigger for bearish traders. Furthermore, the failed attempt to sustain gains above $98 has tilted the short-term structure lower. Meanwhile, the Moving Average Convergence Divergence (MACD) remains in negative territory, and the Relative Strength Index (RSI) hovers near 37. Momentum indicators hint that downside pressure is still dominant despite some intraday stabilization.
The subsequent slide, however, stalls near the 38.2% Fibonacci retracement level of the upswing from the April monthly low. The said support is pegged near the $96.40 region and should act as a key pivotal point, which, if broken decisively, would reaffirm the near-term negative bias and pave the way for further losses. Crude Oil prices might then accelerate the downfall towards the 50% retracement at $93.09 en route to deeper Fibonacci floors at $89.76 and $85.02 ahead of the cycle low region near $78.97.
On the topside, immediate resistance is defined by the 200-hour SMA at $98.63, while a stronger barrier aligns at the 23.6% Fibo. retracement at $100.55. Only a decisive recovery above these levels would ease the current bearish tone.
(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.
