WTI Price Forecast: Gains hold above mid-$85.00s, but bearish potential appears intact

• After hitting its lowest level since late August, WTI builds on the previous day’s rebound.
• Hopes that diplomacy can end the US-Iran war appear to be keeping bulls cautious.
• Positioning for substantial gains also calls for caution given the technical backdrop.

Around $85.70 in early European trading on Wednesday, West Texas Intermediate (WTI), the US Crude Oil benchmark, retains a modestly positive bias. Buyers are seeking to build on the previous day’s solid rebound from the $83.00 area, its lowest level since late August, although hopes of a US-Iran peace agreement leave the advance short of bullish conviction.

A larger-than-expected decline in US crude oil inventories lends some support to oil prices. Meanwhile, the US-Iran stand-off over the Strait of Hormuz and continued attacks on tankers in the strategic waterway keep the geopolitical risk premium in place. Houthi strikes on Saudi oil infrastructure add further uncertainty to the Middle East’s security outlook.

Prospects of a diplomatic breakthrough to end the conflict are nevertheless limiting gains in crude oil prices. On Tuesday, US Secretary of State Marco Rubio said major combat operations against Iran were unnecessary. His comments come as US President Donald Trump told reporters that negotiations to end the Middle East war were gathering positive momentum, encouraging hopes of a resolution through diplomacy.

The near-term technical outlook remains bearish, with the commodity trading below both the 200-day Simple Moving Average (SMA) at $86.42 and the 38.2% Fibonacci retracement at $89.97 of the recovery from $67.08 to $104.12. At the same time, the Relative Strength Index (14) is hovering around 35, while the Moving Average Convergence Divergence (MACD) histogram remains subdued in negative territory.

Although conditions are edging towards oversold territory, the momentum indicators collectively point to continued downward pressure. Any further advance through the 200-day SMA at $86.42 could therefore meet immediate resistance around the 38.2% retracement at $89.97. Only a daily close above that area would ease the prevailing bearish bias and clear a path towards $95.38 and $104.12.

The 50.0% retracement at $85.60 offers the first support on the downside. A break below it would bring the 61.8% Fibonacci level at $81.23 into view, followed by the deeper retracement support levels at $75.01 and $67.08.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

WTI price chart: daily timeframe