WTI Price Forecast: Falls to near $90.00, while bullish structure stays intact
- WTI price slumps to near $90.05 in Friday’s early European session, pressured by some profit-taking.
- Oil price maintains a constructive outlook on the daily chart, with bullish RSI momentum.
- The first upside barrier emerges at $91.25; the initial support level to watch is $90.00.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $90.05 during the early European trading hours on Friday. WTI tumbles as traders book some profits. However, the potential downside might be limited as the escalating conflicts in the Middle East reignite fears over global energy supplies.
The US Central Command (CENTCOM) said on Friday that it has carried out a 13th consecutive night of strikes on Iran, targeting drone facilities, coastal surveillance sites and more. Iranian state media reported explosions along the Strait of Hormuz in Qeshm and Bandar Abbas as well as to the north-west near Andimeshk and Omidiyeh. Fears of oil supply disruption could boost the WTI price in the near term.
Furthermore, Yemen’s Iran-backed Houthi rebels attacked oil tankers in the Red Sea, threatening a key export route that Saudi Arabia has used to bypass the Strait of Hormuz. US President Donald Trump said that the US would hold Iran responsible for the Houthis’ actions and warned that Iran and its Houthi allies would both soon receive a “major military punishment.”
Technical Analysis:
In the daily chart, WTI US Oil holds above the 100-day simple moving average (SMA) and comfortably over the Bollinger middle band, keeping the near-term structure bullish despite the recent pullback from the highs. The Relative Strength Index (14) at 69.5 hovers just under overbought territory, suggesting upside momentum is still present but could be at risk of fatigue if buying extends without consolidation.
On the topside, immediate resistance is seen at the Bollinger upper band around $91.25, where renewed supply could emerge. Further north, the next hurdle is seen at the May 26 high of $93.57, en route to the June 3 high of $94.87.
On the downside, initial support is located at the $90.00 psychologocal level. The next contention level to watch is the 100-day SMA at $88.30, with deeper protection aligning with the Bollinger middle band near $76.75 and the lower band around $62.27 if a more pronounced correction unfolds.
(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 Ukraine conflict intensify
Rabobank’s energy strategists observe that mounting geopolitical risks have been a key driver of the latest move higher across the energy complex. They highlight that “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, drove price rallies across crude oil, refined products, natural gas, and European power markets over the past week.” Set against their medium-term view of gradually easing Brent and WTI prices, the bank suggests the current risk premium embedded in near-dated contracts may not be fully reflected further out along the curve.
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.
