WTI US Oil Price Forecast: Rises to near $88.50 as Kuwait under attack, uptrend remains intact
- WTI price rises to near $88.45 in Monday’s early European session.
- The Kuwaiti military reported a missile and drone attack, raising fears of prolonged conflict in the Middle East.
- The constructive outlook remains intact above the key 100-day EMA.
- The first upside barrier emerges at $95.00; the initial support level is seen at $85.20.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $88.45 during the early European trading hours on Monday. WTI price attracts some buyers following the Kuwaiti military reports of a missile and drone attack. Traders will closely monitor the Middle East developments and the US-Iran peace deal progress.
The Guardian reported on Monday that Kuwait's armed forces said that the country's air defense systems were intercepting hostile missiles and drone attacks after air raid sirens sounded and emergency alerts were issued nationwide. Minutes after Kuwait reported coming under attack, US Central Command (Centcom) said it had conducted “strikes on Iranian radar and command and control sites for drones” over the weekend.
Meanwhile, Iran’s Islamic Revolutionary Guards Corps (IRGC) said that it targeted an airbase used by the US to launch an attack on Sirik Island in southern Iran. Escalating tensions in the Middle East could raise fears of supply disruption and boost the WTI price in the near term.
The release of the American Petroleum Institute (API) report is due later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might weigh on the WTI price.
Technical Analysis:
In the daily chart, WTI US Oil holds a constructive near-term tone while it stays above the 100-day simple moving average (SMA), with the lower Bollinger Band adding intermediate demand beneath spot. Price, however, remains below the Bollinger mid-line, keeping the latest pullback within a broader uptrend, while the Relative Strength Index (RSI) at 42 suggests cooling momentum rather than outright bearish pressure.
On the topside, initial resistance emerges near the May 26 high of $93.57. The next hurdle is located at the Bollinger middle band around $95.00, followed by the 100.00 psychological level and the upper Bollinger Band near $104.76. On the downside, immediate support aligns with the current area around the lower Bollinger Band at $85.20, with the 100-day SMA at $82.56 acting as a more important bullish line in the sand; a sustained break below that zone would significantly weaken the prevailing positive bias.
(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.
Recommended Articles
