WTI Price Forecast: Slides further to near $88 as Trump sees deal with Iran soon
- The Oil price extends its downfall as US President Trump stated a deal with Iran could be reached in two or three days.
- Oil prices started falling after Iran agreed to stop military operations against Israel.
- The 20-day EMA remains a key barrier for the Oil price.
West Texas Intermediate (WTI), futures on NYMEX, is down 1.8% to near $88.10 during the European trading session on Tuesday, and over 6% lower from Monday’s high of around $93.50.
Oil prices faced an intense sell-off on Monday after Iran agreed to halt attacks on Israeli territory, following United States (US) President Donald Trump's call for both nations to stop military operations against each other.
The WTI Oil price rallied early Monday due to the exchange of attacks between Israel and Iran over the weekend, which renewed fears of a resumption of all-out war in the Middle East and a prolonged closure of the Strait of Hormuz, a vital passage to almost 20% of global energy supply. Middle operations between Israel and Iran also dashed hopes of a permanent US-Iran peace deal.
In the European trade on Tuesday, the Oil price has extended its decline as US President Trump has expressed confidence that negotiations with Iran are in “final throes” and the Strait of Hormuz could open up in “two or three days” if an agreement with Tehran is secured, The Guardian reported. The reopening of the Hormuz would prompt energy flows and ease oil prices dramatically.
WTI technical analysis
The WTI US Oil trades lower at around $88.10 at press time. The near-term bias stays bearish as price holds below the 20-day Exponential Moving Average (EMA) at $92.16, keeping recent rebounds capped beneath this dynamic barrier.
The Relative Strength Index (RSI) at 42.83 sits below the midline on the daily chart, hinting at persistent downside pressure even as immediate selling momentum appears contained.
On the topside, the 20-day EMA at $92.16 is the first key resistance, and a daily close above this level would be needed to ease the current bearish tone and allow for a corrective recovery towards the June 3 high at $94.87. On the downside, the Oil price could slide to the April 17 low at $78.88 if it extends the decline below the May 29 low at $85.42.
(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.
Artigos Recomendados
