WTI Price Forecast: Can key support at the 200-day SMA near $86.00 hold?

WTI Oil remains slightly above $86, with losses approaching 15% so far this week.
Hopes for a swift end to the war in Iran have strengthened following Trump's midterm election defeat.
Technical indicators show prices barely holding on to crucial support at the 200-day SMA.

Oil is heading for its steepest weekly fall in months as hopes of an end to the war against Iran gather strength following the Democrats' landslide win in the US midterm elections. Down 14.25% so far this week, US benchmark West Texas Intermediate (WTI) is trading at $87.50 a barrel at the time of writing. Prices earlier tested support near $86.00 at the 200-day Simple Moving Average (SMA).

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Wednesday's sharp sell-off in crude followed US President Donald Trump's decisive midterm election defeat. The result confirmed disapproval of Republican policies, particularly the war in Iran and the effects of the resulting energy shock.

In a Financial Times interview on Wednesday, Trump maintained that he did not regret the intervention in Iran, while stating that the US had no immediate plans to restart hostilities. Vice President JD Vance also identified the war in Iran as the principal reason for the election outcome on Wednesday, fuelling expectations that the government would seek a swift exit from the conflict.

Further declines in crude are being limited by persistent concerns over supply disruptions. On Thursday, Iran's Islamic Republican Guard Corps (IRGC) reported that two oil tankers had caught fire while trying to pass through the Strait of Hormuz along what they described as "an unauthorised route".

Technical Analysis: Can WTI Defend Crucial Support Near $86.00?

With momentum weakening sharply, WTI US Oil is trading at $87.52, barely above its 200-day simple moving average (SMA). On the daily chart, the Relative Strength Index (RSI) has fallen to 36.5. The Moving Average Convergence Divergence (MACD) line has moved below the Signal line, while the histogram has become more negative. Together, these readings suggest the latest pullback is gathering pace, even though the broader trend remains positive.

A confirmed break below the $86.00 region would signal a change in trend and intensify downward pressure towards the late August lows near $79.30, followed by the August 3 low around $73.50. Any recovery would first encounter resistance near $94.50, the former support zone marked by the November 2 low. Beyond that lie last week's highs above $103.67.

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

WTI Oil: Key Questions Answered

What distinguishes WTI Oil?

Among the crude oils traded internationally, WTI, short for West Texas Intermediate, is one of the three main varieties alongside Brent and Dubai Crude. Its relatively low gravity and sulphur content account for the descriptions “light” and “sweet”, respectively. Regarded as a high-quality oil, WTI is straightforward to refine. Production takes place in the United States, with distribution routed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, and its price is regularly cited in media coverage.

What determines WTI Oil prices?

Supply and demand underpin WTI Oil prices, as they do those of other assets. Stronger global growth can lift demand, whereas weaker growth can have the reverse effect. On the supply side, political instability, wars and sanctions can interrupt flows and affect prices. Decisions by OPEC, the grouping of major oil-producing countries, also play an important role. Since oil is traded predominantly in US Dollars, the US Dollar's value influences WTI Crude Oil prices: a weaker currency can make oil more affordable, while a stronger one can do the opposite.

Why do inventory figures matter for WTI Oil prices?

WTI Oil prices respond to weekly inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA), as stock movements indicate shifts in supply and demand. A decline in inventories may point to stronger demand and lift oil prices; rising stocks may suggest greater supply and weigh on prices. The API releases its report on Tuesdays, followed by the EIA the next day. The two sets of figures generally align, coming within 1% of one another 75% of the time. As the EIA is a government agency, its data is regarded as more reliable.

How do OPEC decisions affect WTI Oil prices?

At meetings held twice a year, the 12 oil-producing nations in OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently influence WTI Oil prices. Lower quotas can constrain supply and lift oil prices, whereas increased OPEC production has the reverse effect. The wider OPEC+ grouping brings in ten additional non-OPEC members, with Russia the most prominent among them.