West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $84.00 during the early Asian trading hours on Tuesday. WTI steadies as traders continue to assess the developments surrounding Middle East conflicts.
The United States (US) and Iran ruled out an extension of the Memorandum of Understanding (MoU) that they signed in June to end the conflict. Bloomberg reported on Monday that US President Donald Trump said that he is not interested in renewing the expiring agreement with Tehran.
Trump insisted that Washington had leverage over Iran, citing the naval blockade of Iranian ports. “We control it with the blockade, and I like the idea of declaring it a territory,” said Trump, referring to a US naval blockade on the Iranian coastline. “We have total control over the strait.”
Meanwhile, an Iranian official stated that “Iranian entities must be prepared to escalate tensions in the Strait of Hormuz and wider region, as Iran will be ready to make decisions and take action on difficult decisions.”
On Monday, Iran’s Foreign Ministry spokesman Esmail Baghaei said that an agreement has been elusive due to security complexities and the “obstructionist behavior of destructive elements,” adding that the US must remove its blockade.
Traders brace for the release of the American Petroleum Institute (API) weekly crude oil report, which will be published later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could provide some support to the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might drag the WTI price lower.
Oil positioning leaves scope for short-covering rally
According to TD Securities, positioning in crude still leaves the market vulnerable to a sharp squeeze higher. The bank argues that “there is still a significant risk of a short covering rally, as the underlying fundamentals remain unchanged, and the barrel math still points to persistent supply deficits and ongoing inventory drawdowns,” suggesting that any renewed bout of risk aversion or supply concern could quickly translate into upside pressure for key benchmarks.
Technical Analysis: WTI keeps a bearish vibe under the 100-day SMA
In the daily chart, WTI US Oil maintains a bearish near-term bias as it holds below the 100-day Simple Moving Average (SMA). Price remains above the Bollinger Bands 20-day SMA middle band, suggesting some underlying demand, but the broader structure points to a market still capped by the longer-term average. The Relative Strength Index (14) at 56.03 stays above the neutral 50 line, hinting at modest positive momentum that has yet to overcome overhead resistance.
On the topside, initial resistance is located at the 100-day SMA near $86.20, followed by the Bollinger upper band around $90.25, where selling pressure could intensify if tested. On the downside, immediate support is seen at the Bollinger middle band at $81.70, with a deeper floor emerging near the Bollinger lower band at $73.15, which would come into view if bearish pressure resumes more aggressively.
(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.
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