WTI Price Forecast: Downside likely towards $67 on Hormuz reopening hopes
- The Oil price declines to near $74.00 amid firm hopes of Hormuz reopening.
- Iran and Oman are close to finalizing a proposed agreement to control navigation through Hormuz.
- Investors await global leaders’ reaction if Iran and Oman reach a joint Hormuz agreement.
West Texas Intermediate (WTI), futures on NYMEX, trades 0.45% lower to near $74 during the early European trading session on Thursday, closer to its three-week low of $73.51 posted the previous day. The oil price faces selling pressure amid expectations that the Strait of Hormuz, a vital passage to almost 20% of global energy supply, will reopen soon.
Higher odds of Hormuz reopening are backed by comments from Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, that Iran and Oman are close to finalizing a proposed framework to manage navigation through the passage.
A senior Gulf official said there is a 50% chance that Iran and Oman will reach an agreement on the Hormuz by Friday.
While Iran is confident of introducing a joint toll-type system near the Hormuz, financial markets will look for reactions from global leaders who have favored freedom of navigation through the passage.
So far, the United States (US) has condemned Iran’s intentions for a recognition of its authority near the Hormuz.
The headlines are also contrary to US President Donald Trump’s post on Truth Social, released over the weekend, that Iran has agreed to “Immediate, Complete, and Total opening of the Hormuz Strait”.
WTI technical analysis
The WTI US Oil trades lower at around $74.00, maintaining a bearish near-term bias as price holds well below the 20-day exponential moving average (EMA) at $79.24. The positioning under this key trend gauge suggests rallies remain corrective within a broader downside phase, while the Relative Strength Index (RSI) around 42 stays in neutral-to-soft territory, hinting at modest but not extreme selling pressure.
On the topside, the immediate hurdle is the 20-day EMA at $79.24, which now acts as the first notable resistance and caps any recovery attempts. Looking down, the oil price is expected to extend the decline towards $70; a decisive break below the same would expose it to the five-month low at $67.09.
(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.