WTI rallies back into $92 as extended ceasefire fails to calm supply fears
- Trump extended the US-Iran ceasefire on Tuesday, demanding a unified peace proposal from Tehran to halt renewed strikes.
- Persian Gulf producers cut output by around 6% as the Strait of Hormuz closure pushed regional storage to capacity.
- Thursday's US flash PMI readings and weekly EIA inventory data could shift supply-demand expectations as talks stall.
West Texas Intermediary (WTI) Crude Oil advances more than 3% on Wednesday, trading back above $92 after testing $93 earlier in the session. The move extends a sharp two-day recovery from Monday's low around $85, reclaiming territory last seen in early April. Tuesday's session produced a strong bullish candle with minimal upper wick, and Wednesday's follow-through has come on shallow pullbacks, pointing to firm upside momentum.
The dominant macro driver remains the US-Iran conflict and the uncertainty around Tuesday's extended ceasefire. President Donald Trump extended the two-week truce before it was due to expire Wednesday night, describing Tehran's government as "seriously fractured" and saying the pause would hold only until Iran submits a "unified proposal" to end the war. The extension followed a breakdown in planned talks in Pakistan earlier this week after Iran failed to respond to US negotiating positions, pushing Vice President JD Vance to delay his trip to Islamabad. Markets have been reluctant to price in a durable de-escalation, and the rally off Monday's lows suggests a reversion toward pricing the war premium back in.
Supply fundamentals continue to support elevated prices. Persian Gulf Oil producers have reportedly cut output by about 6% as the Strait of Hormuz blockade pushed regional storage capacity to its limits, while demand destruction estimates sit near 4 million to 5 million barrels per day. Thursday's US flash Purchasing Managers Index (PMI) figures and the weekly Energy Information Administration (EIA) inventory report are the next scheduled catalysts, though Iran headlines are expected to keep setting the tone. Spot WTI has also diverged notably from front-month futures this week, with spot trading near $92 while May futures settled closer to $90 on Tuesday, reflecting deepening backwardation as the physical market tightens.
WTI 15-minute chart
Technical Analysis
In the fifteen-minute chart, WTI US OIL trades at $92.10. The near-term bias is bullish as price holds well above the session open and continues to print higher intraday highs, suggesting persistent buying interest. The Stochastic RSI sits in overbought territory, hinting that upside momentum is stretched but not yet signaling a confirmed reversal, so any pullback would currently look corrective within the short-term advance.
With no nearby moving averages or Fibonacci levels available, traders will focus on price action itself, where minor intraday consolidations and prior swing highs will guide the immediate topside levels as the rally extends. On the downside, only a sustained break back toward the $90.00 region would begin to erode the current bullish structure and open the door to a deeper corrective phase on this timeframe.
In the daily chart, WTI US Oil trades at $92.14, preserving a constructive near-term bias as price holds well above both the 50-day exponential moving average (EMA) at $84.97 and the 200-day EMA at $71.42. The wide gap between spot and these trend measures suggests the broader uptrend remains intact, although the Stochastic RSI near 13 signals deeply oversold momentum, hinting that the latest pullback has stretched the downside in the short term within that broader bullish structure.
On the downside, immediate support is located at the recent close area around $92.14, with stronger trend support emerging at the 50-day EMA at $84.97 and then the 200-day EMA near $71.42 if selling deepens. With no nearby moving average resistance overhead in this dataset, further recovery attempts would likely be driven more by momentum normalization from oversold Stochastic RSI readings than by the clearance of clearly defined technical caps.
(The technical analysis of this story was written with the help of an AI tool.)
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
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
