WTI sticks to gains above $90.00 as US-Iran tensions persist; lacks bullish conviction
- WTI attracts some buyers for the second consecutive day, though the upside remains capped.
- The US-Iran standoff keeps the geopolitical risk premium in play and supports the commodity.
- Traders also seem hesitant and opt to wait on the sidelines ahead of the crucial US NFP report.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – gains positive traction for the second straight day on Friday, extending its recovery from the $86.00 mark, or an over two-month low, touched the previous day. The commodity, however, lacks bullish conviction and currently trades just above the $90.00 psychological mark, up around 0.50% for the day, amid geopolitical uncertainties.
President Donald Trump said on Thursday that the US may have to destroy the rest of Iran and added that people will know soon enough if he acts. Moreover, the US and Iran remain divided over Tehran's nuclear program. In fact, Trump stated that Iran cannot do anything pertaining to its nuclear program without approval from the US. Moreover, threats to commercial traffic persist despite a recovery in crude shipments through the Strait of Hormuz. This keeps the geopolitical risk premium in play and acts as a tailwind for crude oil prices.
Meanwhile, a Democratic sweep in the US midterm elections lowered expectations that US President Donald Trump will resume military strikes against Iran. In fact, top Senate Democrat Chuck Schumer vowed on Wednesday to push for an end to the Iran war and said that his party could use control over government funding to press for that goal. This keeps hopes alive for a diplomatic resolution to end an eight-month-old US-Iran war, which might hold back bulls from placing aggressive bets and cap any meaningful upside for crude oil prices.
Nevertheless, the commodity remains on track to register heavy weekly losses of around 12% and remains at the mercy of further developments surrounding the Middle East crisis. Apart from this, the popularly known US Nonfarm Payrolls (NFP) report, due later during the North American session, could infuse some volatility in the financial markets and produce short-term trading opportunities around the black liquid.
WTI daily chart
Technical Analysis
WTI holds a constructive near-term bias above the 200-day Simple Moving Average (SMA) at $86.10 and has recently pushed through the 38.2% Fibonacci retracement of the broader upswing at $89.88, turning that area into immediate underlying demand. The next resistance aligns at the 23.6% Fibo. level at $95.31, ahead of the cycle high anchor around $104.09, which represents a more distant bullish objective.
On the downside, initial support is seen at the $89.88 zone marked by the 38.2% Fibo. retracement, followed by the 200-day SMA and nearby 50% retracement cluster in the $86.10–$85.49 band, where buyers would be expected to re-emerge on a deeper pullback.
(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.