WTI Price Forecast: Struggles near one-month low, vulnerable around $87.00/below 50% Fibo.
- WTI remains under some selling pressure for the third straight day amid US-Iran peace deal reports.
- The optimism, however, remains capped amid US-Iran disagreements over Tehran’s nuclear program.
- The technical setup favors bears and backs the case for an extension of a two-week-old downtrend.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – trades with a negative bias for the third straight day on Friday and trades around the $87.00 mark during the Asian session, close to a one-month low touched the previous day.
Reports that the US and Iran have reached a deal to extend the ongoing ceasefire for 60 days fuel hopes over the re-opening of shipping traffic through the Strait of Hormuz. This helps ease concerns about the biggest supply disruption in history and turns out to be a key factor undermining Crude Oil prices. That said, the US and Iran remain at odds over Tehran's nuclear program, tempering hopes for a potential peace deal and acting as a tailwind for the black liquid.
From a technical perspective, Crude Oil prices keep a bearish near-term bias on the back of the recent repeated failures near the $106.00 mark and this week's breakdown through the 50-day Simple Moving Average (SMA). Moreover, the commodity now seems to have found acceptance below the 50% Fibonacci retracement level of the post-Iran war upswing, validating the negative outlook and backing the case for an extension of the fall witnessed over the past two weeks or so.
Meanwhile, the Relative Strength Index (RSI) is near 40, which, along with a negative Moving Average Convergence Divergence (MACD) histogram, reinforces weakening momentum rather than any immediate recovery attempt. That said, the 61.8% Fibo. retracement at $82.75 could offer the first meaningful support to Crude Oil prices. A convincing break beneath this floor would open the way for a deeper pullback in the current bearish sequence.
On the topside, initial resistance aligns at the reclaimed 50.0% Fibonacci retracement at $88.56, with a denser cap emerging between the 38.2% retracement at $94.36 and the 50-day SMA at $94.91, ahead of the higher 23.6% retracement at $101.55.
(The technical analysis of this story was written with the help of an AI tool.)
WTI daily 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.
