WTI crude oil price forecast: Technical breakout offsets easing Middle East tensions

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WTI crude oil price forecast

Highlights

WTI trades near $64.2 after a two-day rally fades on easing U.S.–Iran tensions.
Price has broken above the 200-day EMA, signaling a potential trend shift.
U.S. crude inventories fell by 11.1 million barrels, supporting the supply outlook.

The pullback followed a sharp two-day rally driven by Middle East risk concerns and strong U.S. inventory data. With dialogue now replacing confrontation, traders have begun trimming the geopolitical premium priced into crude, though selling pressure remains limited.

Technical breakout keeps recovery intact

From a technical standpoint, WTI continues to show signs of structural improvement. Crude has closed above its 200-day EMA near $62.6, a key level that capped upside throughout much of 2025. Prices are also holding above shorter-term averages, which are now forming a supportive base beneath the market.

WTI crude price dynamics (Source: TradingView)

Momentum indicators remain constructive. The RSI near 60 reflects strengthening upside momentum without entering overbought territory. WTI has also broken above a long-standing descending trendline that limited rallies since late 2025, suggesting sellers are losing control.

Since bottoming near $56 in December, crude has gained more than $8 per barrel, though resistance is now emerging around the $64–$65 zone, an area that previously acted as support last autumn.

Diplomacy trims risk premium as inventories tighten

On the fundamental side, confirmation of U.S.–Iran talks scheduled for Friday in Oman has eased immediate fears of supply disruption through the Strait of Hormuz, a key global energy chokepoint. Iranian officials said discussions will initially focus on nuclear issues, while Washington has signaled a broader agenda.

While diplomacy has reduced near-term risk, expectations for a swift breakthrough remain low, limiting downside pressure on prices. Supporting the market, industry data showed a 11.1 million barrel draw in U.S. crude inventories, highlighting tighter supply conditions if confirmed by official figures.

Outlook

WTI remains supported by improving technical signals and tightening inventories, even as geopolitical tensions cool. Support sits near $62.5–$63, while resistance remains at $65–$66. A sustained move above that zone would strengthen the bullish case.

As previously discussed, crude had already reclaimed its 200-day average, with momentum indicators pointing away from the deeply bearish structure seen late last year.

Recently we wrote that WTI continues to test a descending trendline that has defined price action through much of 2025.

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