WTI oil price forecast: Buyers pause as geopolitical rally faces resistance

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WTI crude oil outlook

Highlights

Price is checking if the buying interest at the $97-$98 range persists.
RSI levels continue to trade between the low-50 and the high-50, indicating a neutral momentum condition.
Upward attempts are weakening, while downward support levels are building up at the $96 level.

WTI crude oil is trading near key short-term price levels, as defined by its respective short-term price moving averages, which are guiding price direction in the near term. The price action trading near these levels is indicative of indecision, as neither buyers nor sellers are in control.

As for the price trading below current levels, we can see that the price is trading below the 100-period EMA, which is trading near $96.15. At the same time, we can see that the 200-period EMA is trading lower near $92.49. All of these indicators indicate that even as we are trading near these levels, the stock is still trading above long-term support levels.

WTI crude oil price dynamics (Source: TradingView)

However, crude oil was unable to sustain its push to the higher prices and the recent highs. It has now started to consolidate, with smaller movements. This is a clear sign of a consolidation phase, where the prices are moving but are controlled.

The current RSI is ranging between 50 and 58. This is a neutral zone for the RSI. It is a common zone where the prices are consolidating before moving further in any direction.

Supply, balance, and demand trends keep crude in a holding pattern

The prices of WTI crude oil continue to be influenced by factors such as a balance between stable supply and demand. The level of production has been stable, which is preventing prices from going down.

On the other hand, demand from various sectors has been stable, but it is not sufficiently high to increase prices. Global factors, such as trade and politics, are influencing oil prices, but as long as there is no significant trigger, it is likely to be sideways movement in prices rather than an upward or downward movement.

Inventory and export levels are also influencing factors in this market. In the case of an unexpected tightening in supply, prices could move up suddenly, but as long as these factors are stable, volatility in prices is kept in check.

The technical structure reflects a pause after the upward move

If oil continues to trade around this range and stays above $97, another leg up could be seen. However, more strength would be required for this price to move further up. On the other hand, if oil falls below $96, this could change the picture and expose oil to a possible move down towards $94, depending on how selling pressure develops in this market.

As per earlier analysis, the market was able to establish support around the $97 range, as seen in the previous rally. Now, it appears that this support is holding, and this is why the market is stable.

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