West Texas Intermediate (WTI) futures on NYMEX are giving up early gains after posting a up-to-date seven-week high around $107.35, then flattening to nearly $104.85 during the European trading session on Thursday.
The price of crude oil is generally upbeat after US President Donald Trump warned of a prolonged blockade of Iranian seaports after rejecting Iran’s proposal to reopen the Strait of Hormuz – a vital passage providing almost 20% of the world’s energy supply – Bloomberg reports. Trump added that the naval blockade of Iran would continue until Washington signs an agreement with Tehran to disband that country’s nuclear program.
In response, Iran warned of “unprecedented military action” against the United States’ continued blockade of Iran-linked ships.
The prolonged closure of Hormuz has caused an energy supply crisis, weakening the currencies of economies that rely on oil imports to meet their energy needs.
Meanwhile, comments from Wednesday’s Federal Reserve (Fed) policy announcement that interest rates would be kept at current levels raised concerns about the outlook for oil demand. Fed Chairman Jerome Powell said at a press conference Wednesday that “the current policy position is the right one” and that risks to both inflation and the economy have increased.
WTI technical analysis
At press time, WTI US Oil is trading flat around $104.82, maintaining a bullish near-term bias as the price remains well above the 20-day exponential moving average (EMA) of around $94.60, which is currently well below the spot price and highlights the strength of the recent advance.
A relative strength index (RSI) of around 64 suggests forceful but not yet overbought bullish momentum, suggesting buyers are maintaining control despite the market’s pointed deviation from the mean.
In the absence of nearby moving average support below the current price, the market remains in a stretched phase where any pullback towards the 20-day EMA near $94.60 will be viewed as a potential area of ​​dip-buying interest rather than a structural breakdown. Moreover, the price of oil is likely to continue rising towards the multi-year high of $113.28 posted on March 9.
(The technical analysis for this story was written with the facilitate of an AI tool.)
Frequently asked questions about WTI crude oil
WTI Oil is a type of crude oil sold on international markets. WTI stands for West Texas Intermediate, one of three main types, including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” due to its relatively low weight and low sulfur content. It is considered a high-quality oil that can be easily refined. It originates in the United States and is distributed through the Cushing Junction, considered the “Crossroads of the World.” It is a reference point for the crude oil market, and the WTI price is often quoted in the media.
Like all assets, supply and demand are key factors influencing the price of WTI crude oil. Therefore, global growth may drive increased demand and, conversely, delicate global growth. Political instability, wars and sanctions can disrupt supply and affect prices. Another key factor shaping prices are the decisions of OPEC, the group of major oil-producing countries. The value of the US dollar affects the price of WTI crude oil because oil is mainly sold in US dollars, so a weaker US dollar can make oil more affordable and vice versa.
Weekly crude oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Administration (EIA) influence the price of WTI crude oil. Inventory changes reflect fluctuations in supply and demand. If the data shows a decline in inventories, it may indicate increased demand, which will result in an enhance in the price of oil. Higher inventories may reflect increased supply, which causes prices to fall. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar and are within 1% of each other 75% of the time. EIA data is considered more reliable because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 oil-producing countries that jointly decide on production quotas for member countries at meetings held twice a year. Their decisions often influence the prices of WTI crude oil. When OPEC decides to cut quotas, it can tighten supply, which will push up oil prices. OPEC increasing production has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, the most notable of which is Russia.
