WTI Price Forecast: Seems vulnerable below $80.00 as break below 50% Fibo. comes into play
- WTI prolongs its weekly downtrend for the third straight day amid easing geopolitical tensions.
- The technical setup seems tilted in favor of bearish traders and backs the case for further losses.
- Any meaningful recovery attempt might now be sold into and is more likely to remain capped.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – remains under some selling pressure for the third straight day and drops to a nearly two-week low during the Asian session on Wednesday. The black liquid currently trades just below the $80.00 psychological mark and could extend its retracement slide from the monthly peak, touched last Friday, amid positive developments surrounding the Middle East crisis.
In fact, Iran said that it had restarted talks with neighbor Oman to manage commercial shipping traffic through the key Strait of Hormuz. Adding to this, the US offered Iran sanctions relief and an end to the naval blockade in exchange for reopening the strategic waterway and halting attacks carried out by its regional proxies. This revived hopes for a diplomatic resolution to end the US-Iran war and prompts traders to price out the geopolitical risk premium, which, in turn, is seen weighing on crude oil prices.
From a technical perspective, the overnight breakdown below the 100-period Exponential Moving Average (EMA) on the 4-hour chart was seen as a key trigger for bearish traders. Moreover, the commodity now trades below the 50% Fibonacci retracement level of the recent recovery from the monthly swing low, reinforcing the negative outlook and backing the case for deeper losses. Meanwhile, momentum indicators remain heavy and hint that any bounce would still need to overcome nearby resistance to shift the tone.
The Moving Average Convergence Divergence (MACD) stays below zero with the latest reading at -0.65, while the Relative Strength Index (RSI) at 23.15 shows oversold territory. On the downside, initial support emerges at the 61.8% retracement at $78.61, ahead of deeper Fibonacci backing at $76.27 and the structural floor around the prior swing low near $73.30. A sustained break below the latter would likely extend the current bearish phase toward those lower levels despite the increasingly oversold conditions.
On the topside, immediate resistance appears at the 50.0% retracement at $80.26, followed by the 38.2% level at $81.90 and the 100-period EMA at $82.44. This forms a dense supply band ahead of the higher 23.6% retracement at $83.93 and the recent cycle high zone near $87.22.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 4-hour chart
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
