WTI Price Forecast: Rises To Near $85.00 On Supply Disruption, But Remains Capped Below 100-Day SMA

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $84.90 during the early European trading hours on Wednesday. The WTI rises as rising tensions in the Middle East raise fears of further disruptions to global oil supplies and international trade.  

Concerns over potential supply disruptions grow as shipping traffic through the vital Strait of Hormuz has essentially halted, boosting the WTI price. Furthermore, Yemen’s Houthis said that they have closed the Bab el-Mandeb strait to Saudi-linked shipping in retaliation for the kingdom’s blockade on Yemen and a recent attack on the international airport in Yemen’s rebel-held capital, Sanaa. 

It’s worth noting that Bab el-Mandeb is a vital shipping chokepoint, connecting the Red Sea to the Gulf of Arabia. Around 12% of the world’s trade passes through the narrows. 

The US Energy Information Administration (EIA) weekly crude oil report is due later on Wednesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might undermine the WTI price.

Technical Analysis:

In the daily chart, the near-term bias of WTI US Oil is bearish as price holds below the 100-day Simple Moving Average (SMA), leaving the recovery capped by this longer-term trend barrier and the upper Bollinger Band around. The Relative Strength Index (RSI) at 64.01 shows firm but increasingly stretched bullish momentum, suggesting that while buying pressure persists, upside is vulnerable to rejection against the overhead technical cluster.

On the topside, immediate resistance is located at the upper Bollinger Band near $85.95, en route to the 100-day SMA at $88.05, which together define a key supply zone that bulls would need to reclaim to neutralize the current cap. 

On the downside, initial support emerges at the $80.00 psychological level. The next contention level is seen at the July 17 low of $77.90, followed by the Bollinger middle band around $74.70, ahead of a deeper cushion at the lower band near $63.45, where any extended pullback would be expected to attract dip-buying interest in the broader range structure.