WTI crude oil price forecast: Market tests $61 support as oversupply caps rebound

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WTI crude oil price forecast

Highlights

WTI holds near $62.87 after two straight weekly declines.
IEA projects a significant 2026 surplus while trimming demand outlook.
Support sits at $61–62, with resistance near $64–65.

Crude rallied from December lows near $55 to test $66–67 in early February, but the failure to sustain gains above $65 triggered a pullback. Prices are now consolidating in a narrow band, suggesting traders are waiting for clearer signals.

Technical picture signals indecision

From a chart perspective, WTI is hovering just above the Parabolic SAR at $61.40, keeping the medium-term uptrend technically intact but under strain. A tight cluster of moving averages reinforces the sense of indecision. The 50-day EMA sits at $62.71, the 100-day EMA at $61.22, the 200-day EMA at $62.63, and the longer-term 200-day MA at $61.09.

WTI crude oil price dynamics (Source: TradingView)

This compression of key indicators around current prices often precedes a directional move. The $61–62 zone now represents critical support, marking the confluence of multiple averages and the breakout level from the earlier descending trendline. A sustained break below $61 would undermine the recent recovery structure and expose $58–60. Conversely, a move back above $64–65 would suggest the retracement was corrective rather than structural.

The recent consolidation near $62–63 underscores a pause in momentum rather than decisive selling, though conviction remains limited.

Geopolitics clash with supply reality

Fundamentally, crude faces competing narratives. U.S.–Iran nuclear talks have entered a second round, with Washington maintaining a firm stance and expanding its military presence in the region. President Trump has warned of potential strikes should negotiations collapse, while Iran has signaled conditional willingness to engage. Tensions have been further complicated by a Ukrainian drone strike on a Russian Black Sea port ahead of U.S.-brokered peace discussions.

Such developments typically support a geopolitical risk premium, particularly given the sensitivity of global supply routes. However, that premium is increasingly challenged by surplus forecasts.The International Energy Agency reaffirmed projections of a sizable global oil surplus in 2026 while trimming demand growth estimates. Reports also suggest some OPEC+ members see scope to resume production increases as early as April, which could further swell supply. These signals follow earlier inventory builds and reinforce the perception that global supply remains ample despite regional tensions.

As previously discussed, WTI’s recovery from the $55 lows was fueled largely by risk premium expansion rather than tightening fundamentals. The current pullback highlights how quickly sentiment shifts when surplus narratives reemerge.

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