WTI Price Forecast: Sellers hold control below 200-day SMA, downside bias intact
- WTI extends its corrective slide on Monday, resuming its pullback after peaking at a seven-week high late last week.
- Price action remains trapped between $61.50-$65.00 range since mid-August, with the 50-day SMA acting as a key near-term pivot.
- A sustained recovery above $65.00 and last week’s $66.19 peak would open the door for a retest of the July swing high near $70.00.
West Texas Intermediate (WTI) Crude Oil kicks off the week on a softer footing, resuming its downside correction after peaking at a seven-week high on Friday. At the time of writing, WTI trades near $63.75 per barrel, down nearly 2.0% on the day.
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From a technical perspective, the daily chart shows that price action has been confined within a horizontal band between $61.50 and $65.00 since mid-August. Bulls have repeatedly failed to force a close above the upper boundary, where the 200 Simple Moving Average (SMA) and a prior swing-high convergence. On the downside, dip buyers continue to step in near the $62.00-$ 61.50 floor, thereby preserving the broader sideways structure.
The 50-day SMA near $64.00 is acting as a near-term pivot as the market tests this level. A decisive daily close below the 50-day SMA would likely embolden sellers and expose the range floor near $62.00-61.50.
The 14-day Relative Strength Index (RSI) sits near 52.9, pointing to neutral momentum after failing to push above the mid-50s, while the Average Directional Index (ADX) is subdued at 12.4, indicating a weak underlying trend. Unless these gauges turn higher alongside a price breakout above the 200-day SMA, further upside looks limited.
Overall, WTI remains confined to a broad range, with sideways trading likely to persist until a fresh catalyst emerges. A clear break below $61.50 would expose downside targets at $60.00 and $59.50. On the upside, a sustained recovery above $65.00 and last week’s high at $66.19 would open the door for a retest of the July swing high near $70.00.
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.
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