WTI Price Forecast: Sticks to gains near $89.50; bulls seem hesitant below 200-SMA on H4
- WTI builds on the overnight rebound from a one-month trough, albeit it lacks bullish conviction.
- Geopolitical risks overshadow easing supply concerns, lending some support to the black liquid.
- The technical setup warrants caution before positioning for any meaningful appreciating move.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts some follow-through buying for the second consecutive day on Wednesday, building on the previous day's rebound from an over one-month low. The commodity, however, lacks bullish conviction and trades near the $89.50 region during the Asian session, up around 0.30% for the day.
The geopolitical risk premium remains in play amid rising tensions between the Iran-backed Houthis in Yemen and Saudi Arabia. In the latest developments, Saudi-backed Yemen's internationally recognized government forces claimed control over strategic points along the Red Sea coast, including areas around the Bab al-Mandeb Strait. The Houthis retaliated by attacking key targets in Saudi Arabia, including an Aramco refinery in Riyadh.
Furthermore, Iran has intensified attacks on tankers in the Strait of Hormuz. This, along with a developing storm in the Gulf of Mexico, threatens key US energy production and refining infrastructure, overshadows easing supply concerns, and acts as a tailwind for crude oil prices. The lack of follow-through buying, however, warrants some caution before placing aggressive bullish bets and before positioning for any meaningful near-term appreciation.
From a technical perspective, oil prices hold below the 200-period Simple Moving Average (SMA) on the 4-hour chart, which keeps the near-term bias capped despite a mildly constructive undertone in momentum. The Moving Average Convergence Divergence (MACD) has turned positive at 0.15 and is edging higher, while the Relative Strength Index (RSI) around 50.55 stays neutral-to-positive, suggesting that rebounds may face selling interest.
Meanwhile, initial resistance is located at the 200-period SMA at $90.66, followed by the 38.2% Fibonacci retracement of the broader upswing at $91.05, with a stronger barrier at the 23.6% retracement near $95.25 and the cycle high anchor around $102.03. On the downside, first support emerges at the 50% retracement at $87.66, ahead of deeper structural levels at the 61.8% retracement at $84.27 and then $79.44 and $73.29, if selling pressure extends.
(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.
