WTI Price Forecast: Slides below $80 on US-Iran deal finalization

The Oil price plummets to near $79.50 as US President Trump announces the reopening of the Strait of Hormuz.
Iran said the Hormuz reopening would take place within 30 days under Iranian arrangements.
The oil supply could remain limited as the war has damaged the Middle East’s energy infrastructure.

Sagar Dua FXStreet

West Texas Intermediate (WTI), futures on NYMEX, trade over 4% down to near $79.50 in the European trading session on Monday. The Oil price faces intense selling pressure as United States (US) President Donald Trump announces the reopening of the Strait of Hormuz, a vital passage to almost 20% of global energy supply, after finalizing a memorandum of understanding (MoU) with Iran, which will be signed on June 19 in Switzerland.

On Sunday, US President Trump said in a post on Truth Social, “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.”

However, Iranian Mehr News Agency has reported that the reopening of the Strait would take place within 30 days “under Iranian arrangements”. Similarly, the US blockade of Iran would be lifted within 30 days, as per Seatrade Maritime News.

The oil price surged significantly when the war started as Iran closed the Hormuz, and demanded recognition of Tehran’s authority on the same.

While oil prices have recovered strongly, market experts doubt that the downfall will continue due to the damage to Middle East energy infrastructure in the exchange of attacks between the US-Israel and Iran.

"You may see (oil) break $80 on just, you know, happy days today...but then maybe the market will realize that, oh, wait a minute, maybe the terms of the deal may not be as lucrative. We also think that oil prices will remain a little bit on the higher side only because infrastructure has been damaged," analysts at ANZ said, Reuters report.

WTI technical analysis

The WTI US Oil trades lower at around $79.50 at press time. The near-term bias is bearish as price holds well below the 20-day Exponential Moving Average (EMA) at $89.44, underscoring persistent overhead supply after the recent slide.

The Relative Strength Index (RSI) slides to 34.84, which suggests that the downside momentum remains in place and could intensify further.

On the topside, the 20-day EMA at $89.44 forms the first meaningful resistance, and a recovery above this dynamic cap would be needed to ease the immediate bearish tone and open the door to a deeper corrective bounce. Looking down, the oil price could slide to the March 10 low at $75.95 if it extends its decline below the April 17 low at $78.88. Further support levels are $70.00, and the February 27 high at $67.74, which is the pre-war level.

(The technical analysis of this story was written with the help of an AI tool.)

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.

GBP/USD advaces beyond 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, surpassing 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushed the pair further up ahead of the monthly close.

EUR/USD confortable around 1.1530, highest in six weeks

The EUR/USD pair trades around 1.1530 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Ripple Price Forecast: XRP builds recovery momentum as whales increase exposure

Ripple (XRP) rises toward the pivotal $1.10 resistance on Thursday, marking three consecutive days of gains. This neutral-to-slightly bullish outlook follows the Federal Reserve (Fed) decision to leave interest rates unchanged in the 3.50%-3.75% range.

The FOMC: Rates left on hold; dollar falls as Warsh fails to vote for hike

The Fed kept interest rates on hold today, defying a 30% chance in the Fed Funds Futures market that rates would rise. The Committee voted 9-3 to keep rates on hold, with governors Kashkari, Hammack and Logan all voting to hike rates due to concerns about inflation. The immediate market reaction has been a sharp drop in the USD on a broad basis.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.