WTI Price Forecast: Why are fears of renewed escalation in Middle East conflicts lifting prices above $100?

Oil surges towards $100 amid a further increase in energy supply risks.
Fresh strikes on Iran remain an option as the US and Israel signal their readiness.
Saudi Arabia’s largest oil refinery comes under attack from Iran-backed Houthis.

Fears of renewed escalation in Middle East conflicts are lifting oil prices, with West Texas Intermediate (WTI) futures on NYMEX gaining 1.42% to trade near $101.00 during Wednesday’s European session. The concerns follow warnings from the United States (US) and Israel that they are ready to launch fresh attacks on Iran after elections in their respective countries.

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Why is renewed Iran risk lifting Brent?

Brent crude’s recent advance is continuing, according to strategists at Deutsche Bank, who describe it as “+1.48% higher again overnight as the WSJ reported the Trump administration warning Gulf states to be prepared for a new operation against Iran after the midterms.” Further support from geopolitical concerns comes from Netanyahu’s post-election speech. Danske Bank’s research team notes that “Netanyahu raised the prospects of renewed joint action with President Trump against Iran.”

Tighter US energy supply is also supporting oil prices, Deutsche Bank notes. In a research note, the bank wrote: “The API data showed a decline in US crude inventories of around 2 million barrels last week, pointing to continued tighter supply,”

Energy supply risks have also increased as tensions rise between Saudi Arabia and Yemen’s Iran-aligned Houthis.

A military spokesperson for Yemen’s Iran-aligned Houthis said on Tuesday that the group had fired a ballistic missile towards the Ras Tanura oil refinery in eastern Saudi Arabia, the kingdom’s largest refinery, according to Reuters.

WTI Technical Analysis: Can the Bullish Bias Hold?

A firm position above the 20-day Exponential Moving Average (EMA) at $96.52 keeps the near-term outlook bullish for WTI US Oil, which is trading near $101 on the daily chart. As long as spot remains above this dynamic support, the short-term trend structure stays positive. A Relative Strength Index (RSI) reading near 63 suggests solid upward momentum without yet indicating overbought conditions.

The first downside support lies at the 20-day EMA around $96.52. A daily close beneath it would suggest that buyers are losing control and leave prices vulnerable to a deeper correction. On the upside, the 23 October high of $103.28 presents the initial resistance, followed by the key barrier at the 18 May high of $104.74.

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

WTI Oil: Frequently Asked Questions

What does WTI Oil refer to?

Traded in international markets, WTI Oil is a variety of crude oil. Its name stands for West Texas Intermediate, which ranks alongside Brent and Dubai Crude as one of the three major types. The descriptions “light” and “sweet” refer, respectively, to its relatively low gravity and sulphur content. These characteristics make it a high-quality oil that is easy to refine. Produced in the United States, WTI is distributed 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 reports.

What determines WTI Oil prices?

Supply and demand determine WTI Oil prices, as they do for other assets. Stronger global growth can therefore boost demand, while weaker growth can have the reverse effect. Supply disruptions caused by political instability, wars or sanctions can also affect prices. Another major influence is the set of production decisions taken by OPEC, a group of leading oil-producing countries. Since oil is traded mainly in US Dollars, the currency’s value also matters for WTI Crude Oil prices: a weaker US Dollar can make oil more affordable, while a stronger one can have the opposite effect.

Why do inventory figures affect WTI Oil prices?

WTI Oil prices respond to the weekly oil inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA), as stock changes reflect shifts in supply and demand. A fall in inventories may signal stronger demand and lift oil prices. By contrast, rising stocks may indicate greater supply and weigh on prices. The API releases its report every Tuesday, followed by the EIA the next day. The two sets of figures are generally similar, coming within 1% of each other 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 that make up OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently influence WTI Oil prices. Lower quotas can restrict supply and lift oil prices, whereas an increase in OPEC production has the reverse effect. The broader OPEC+ grouping includes ten additional countries outside OPEC, with Russia the most notable member.