WTI Price Forecast: Rejection at the 200-day SMA keeps bears in control
- WTI drops more than 3% after failing to clear the 200-day SMA at $73.35.
- The technical bias remains bearish despite signs of improving near-term momentum.
- Immediate support lies at $67, while a break above the 200-day SMA could pave the way toward the $80 psychological level.
West Texas Intermediate (WTI) crude Oil edges lower on Thursday, erasing all of the previous day's gains as traders reassess the supply risks stemming from renewed US-Iran tensions. At the time of writing, WTI is trading around $71.75, down 3.77% on the day.
Crude Oil prices surged earlier this week after the United States and Iran exchanged military strikes, raising fears that shipping through the Strait of Hormuz could once again face disruptions.
However, markets see the latest flare-up as unlikely to escalate into a full-blown war and expect shipping through the Strait of Hormuz to continue to recover.
From a technical perspective, Thursday's decline follows a rejection at the 200-day Simple Moving Average (SMA) near $73.35, which acts as immediate resistance.
WTI also remains well below the 100-day SMA around $86.91, suggesting sellers retain the upper hand despite signs of improving momentum.
The Relative Strength Index (RSI) has rebounded from near-oversold levels to around 40.20 but remains below the neutral 50 mark, indicating bullish momentum is still limited.
Meanwhile, the Moving Average Convergence Divergence (MACD) has turned positive, pointing to early recovery attempts that remain capped by key overhead resistance.
On the upside, a break above the 200-day SMA at $73.35 could pave the way for a move toward the $80.00 psychological resistance level, followed by the 100-day SMA near $86.91.
On the downside, immediate support is seen at $67.00. A break below this level could reopen the path toward the $60.00 area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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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