WTI Price Forecast: Middle East tensions lift Oil as bulls test the 100-day SMA
- WTI climbs to its highest level since June 11 as Middle East supply risks intensify.
- WTI challenges the 100-day SMA after a strong recovery from July lows.
- Positive RSI and MACD readings reinforce the bullish bias.
WTI extends its rebound on Wednesday as rising tensions in the Middle East disrupt Oil flows through the Strait of Hormuz and the Red Sea. At the time of writing, WTI trades around $86.20 after reaching an intraday high of $87.83, its highest level since June 11.
The US military carried out an eleventh consecutive night of strikes against Iran, while Tehran responded with fresh attacks targeting Bahrain, Kuwait and Jordan. Meanwhile, three tankers carrying Saudi crude reportedly reversed course in the Red Sea following threats from the Iran-backed Houthis.
From a technical perspective, WTI staged a sharp recovery after retesting the pre-war level near $67 earlier this month. The price then reclaimed the 200-day Simple Moving Average (SMA) around $74 and is now testing the 100-day SMA near $88.
Momentum continues to favor the upside. The Relative Strength Index (RSI 14) has climbed to 66.61, approaching overbought territory, while the Moving Average Convergence Divergence (MACD) remains in positive territory, with the MACD line above the signal line and a widening positive histogram, hinting at persistent upside pressure.
On the downside, initial support is seen at the $80.00 psychological level, followed by the 200-day Simple Moving Average (SMA) at $74. A deeper pullback could bring the pre-war support zone near $67.00 back into focus.
On the upside, the 100-day SMA at $88 is the first resistance level. A decisive break above it could pave the way for a move toward the horizontal resistance zone around $95.00.
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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