WTI Price Forecast: Tests 6-week highs near $87.50, while bearish bias holds below 100-day SMA
- WTI price climbs to near $87.50 in Thursday’s early European session.
- Oil price remains bearish under the 100-day SMA on the daily chart.
- The critical resistance level emerges in the $88.10-$88.15 zone; the first downside target to watch is $75.55.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $87.50 during the early European trading hours on Thursday. WTI jumps to the highest since June 11 amid rising tensions in the Middle East after a 12th straight night of strikes on Iran and with major disruption now facing two of the world’s key supply routes.
The latest strikes came after US President Donald Trump threatened to destroy an Iranian bridge or power plant every time Iran fires at a ship in the Strait of Hormuz, raising tensions around the key oil transit route.
The Islamic Revolutionary Guard Corps (IRGC) said on Thursday that no tanker will enter or leave the critical waterway without coordination with Iran. Meanwhile, the Houthis, the Iran-backed group in Yemen, on Thursday claimed an attack on two Saudi oil tankers transiting through the Red Sea, identified as ENCELA and LAYLIA, saying the vessels violated the naval blockade imposed by the group on Monday.
"This price increase is not necessarily due to a reduction in oil production, but rather because, from the market's perspective, conditions will remain volatile throughout the week, especially if Saudi oil exports to Asia or Red Sea shipping face further disruption,” said analysts at the consulting firm Gelber & Associates.
Technical Analysis:
In the daily chart, the near-term bias of WTI US Oil appears bearish as price holds just under the 100-day simple moving average (SMA), keeping the recent rebound capped beneath this trend marker. The upper Bollinger Band adds to the overhead supply, while the Bollinger middle band around far below current levels, highlights how extended the latest leg higher has become. A Relative Strength Index (14) reading near 67.5 sits close to overbought territory, suggesting upside momentum is strong but increasingly stretched against the prevailing resistance band.
On the topside, the key resistance is clustered between the upper Bollinger Band at $88.10 and the 100-day SMA at $88.15. A daily close above this zone could pave the way to the $90.00 psychological level.
On the downside, initial support is defined by the Bollinger middle band near $75.55, ahead of a deeper technical floor at the lower Bollinger Band around $63.00, where any corrective slide would likely meet stronger dip-buying interest.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Energy complex rallies as US-Iran tensions and Russia-Ukraine strikes escalate
Rabobank’s energy strategists observe that geopolitical risks have intensified, with “the escalation between the U.S. and Iran following the collapse of the interim peace deal, as well as intensifying strikes between Ukraine and Russia,” driving broad-based strength across the complex. They note that these developments “drove price rallies across crude oil, refined products, natural gas, and European power markets over the past week,” reinforcing the recent surge in benchmark crude and refined product prices highlighted in their latest outlook.
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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