WTI drifts higher above $90.00 as traders assess US-Iran war future
- WTI price edges higher to near $90.15 in Friday’s early Asian session.
- Democrats swept the House and Senate in Tuesday’s elections.
- Trump says Tehran can’t do anything on its nuclear program “without our approval.”
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $90.15 during the early European trading hours on Thursday. WTI gains traction as traders assess the outlook for US-Iran relations following the US midterm elections and recovering oil supplies from the Middle East.
Crude oil prices extend their recovery after facing Wednesday's sell-off. The Democrats swept the House and Senate in Tuesday's midterm elections, which prompted speculation that US President Donald Trump would face pressure to end the eight-month conflict with Iran.
However, the prospects for a quick resolution appeared considerably less certain. Traders reconsider whether the US midterm election results would actually bring a swift end to the Iran war.
The sell-off “could be getting a bit overdone,” said Rebecca Babin, senior energy trader at CIBC. “The market is in a shoot first, ask questions later mode as emotions run high after the unexpected election results,” Babin added.
Bob McNally, president of Rapidan Energy and a former advisor to President George W. Bush, said that the odds still favor military escalation in the region.
Trump stated on Thursday that Iran cannot do anything pertaining to its nuclear program without “approval” from the US. He added that “We need to decide whether to go further or certify it.”
Reuters reported at least five vessel incidents in the Persian Gulf since Sunday, with threats to commercial traffic persisting despite a recovery in crude shipments through the Strait of Hormuz.
Trump risk still looms over oil and trade despite calmer rhetoric
According to TD Securities, recent geopolitical signals may suggest a tilt toward de-escalation, but they caution that President Trump retains ample scope to unsettle markets. On geopolitics, the bank notes that “recent rhetoric appears to point toward de-escalation, but Trump could pursue escalation against Iran, which could send oil prices sharply higher.” They add that “the rates-oil correlation has reversed in recent weeks but could resume if oil prices spike sharply,” underscoring the potential for a renewed linkage between crude and interest rates if tensions flare.
On the trade front, TD Securities similarly stresses that “Trump has significant latitude on the trade front, though markets have become less reactive to modest escalations in trade policy.” However, they warn that “another major Liberation Day-type move could unnerve investors,” suggesting that while incremental policy shifts may now elicit a more muted response, a large, unexpected shock could still prove highly disruptive for risk sentiment.
Technical Analysis: WTI maintains a constructive outlook above the 100-day SMA
In the daily chart, WTI US Oil holds a constructive near-term bias as it remains above the 100-day simple moving average (SMA), keeping the broader uptrend intact despite the recent pullback from the mid-$90s. Price is currently lodged between the Bollinger Bands’ lower band and the middle band, suggesting consolidation within an established bullish structure, while the Relative Strength Index (14) around 41 shows cooling momentum rather than outright bearish pressure.
On the topside, initial resistance is located at the Bollinger middle band at $96.75, with a more significant barrier at the upper band near $105.15, where buying interest could start to fade. On the downside, immediate support is seen at the lower Bollinger band at $88.30, followed by stronger trend support at the 100-day SMA around $86.25; as long as these floors hold, dips are likely to be absorbed, keeping the bias tilted to the upside.
(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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