WTI hovers near one-month highs as Hormuz supply risks remain in focus

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West Texas Intermediate (WTI) crude Oil consolidates modest losses on Wednesday but stays close to a one-month high as escalating Middle East tensions keep supply risks around the Strait of Hormuz in focus. At the time of writing, WTI trades around $78.70, up roughly 10% so far this week.

WTI holds near one-month highs as Middle East tensions keep supply risks elevated.
US crude inventories fall by 1.693 million barrels, less than markets expected.
WTI stays above the 200-day SMA, with buyers facing resistance near $80.00.

Traders also digest the latest US Energy Information Administration (EIA) report, which showed that crude Oil inventories fell by 1.693 million barrels last week, less than the expected 2.6 million-barrel decline. The draw reversed the previous week’s 2.998 million-barrel increase, which had marked the first inventory build in eleven weeks.

US forces carried out another round of strikes against Iran. The US Central Command said the attacks were aimed at weakening Iran’s ability to target commercial shipping in the Strait of Hormuz.

Tehran continues to insist that the Strait falls under its sovereignty and that vessels must coordinate with Iranian authorities and follow shipping routes designated by Iran. Against this backdrop, ongoing supply disruptions keep a geopolitical risk premium embedded in Oil prices.

Technical Analysis

In the daily chart, WTI holds above the 200-day Simple Moving Average (SMA) at $73.67, hinting at a tentative constructive bias, yet it remains capped below the 50-day SMA at $83.80 and the 100-day SMA at $87.33, which keep the broader recovery in check.

The Relative Strength Index (RSI) around 54 leans mildly bullish, while the Moving Average Convergence Divergence (MACD) is positive, suggesting improving momentum but not yet a decisive break of the prevailing overhead structure.

On the topside, initial resistance emerges at the horizontal barrier near $80, ahead of the 50-day SMA at $83.80 and the 100-day SMA at $87.33, where a more meaningful bullish extension would likely face stronger supply.

On the downside, immediate support is seen at the 200-day SMA clustered around $73.67, with a deeper bearish turn exposing the next key floor at the prior horizontal base near $67.00.

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

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.