West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $87.50 during the early Asian trading hours on Friday. WTI loses momentum amid growing US crude oil inventory.
US crude oil inventories showed a sharp build last week, feeding worries about oversupply. According to the Energy Information Administration (EIA), crude stockpiles climbed by 9 million barrels in the week ending November 5, compared to a fall of 5.267 barrels in the previous week. The market consensus was for a decline of 1 million barrels.
US President Donald Trump said on Thursday that the US should no longer seek a deal with Iran, per CNBC. “We don’t need a deal with Iran. Those days have long since passed,” Trump wrote in a Truth Social post.
His remarks came just over a week after Republicans suffered huge losses in the US midterm election. Vance and other Republicans have pinned those losses on the Iran war, which the US and Israel started in late February. Trump’s comments stoked worries that an end to the US-Iran war was not in sight.
Attacks on Saudi energy infrastructure escalated, and shipping disruptions through the Strait of Hormuz threatened global oil flows.
Yemen’s Iran-aligned Houthis said that they had attacked a pumping station on the Saudi East-West oil pipeline, an oil facility in the Saudi Red Sea city of Yanbu, and an Aramco building in the capital, Riyadh.
Meanwhile, Iran’s military said on Thursday that four oil tankers were hit by explosions in the Strait of Hormuz after ignoring warnings.
Brent finds support as Strait of Hormuz tensions flare
Analysts at Commerzbank Research report that “tensions in the Strait of Hormuz escalated overnight,” with Iran’s IRGC Navy claiming that “two additional oil tankers struck mines while attempting to transit the waterway, with both vessels reportedly on fire.” Against this backdrop, Commerzbank notes that “Brent crude rose 1.2% to USD92.63, as the latest Hormuz mine incidents provided a floor to prices despite the broader November slide of approximately 17%.”
Technical Analysis: WTI keeps a consolidation mode in the near term
In the daily chart, the near-term tone of WTI US Oil appears neutral to range-bound as price holds just above the 100-day simple moving average (SMA) while remaining well below the Bollinger Bands’ 20-day SMA center line, which caps the topside. The lower Bollinger band at $82.30 underpins the broader consolidation, and the Relative Strength Index (RSI) at 40.6 sits below the 50 mark, hinting at mild bearish momentum but not a decisive trend break.
On the topside, initial resistance is located at the Bollinger 20-day SMA center band near $94.60, with a stronger barrier at the upper Bollinger band at $106.85. On the downside, immediate support is seen at the 100-day SMA at $87.00, ahead of a more important structural floor at the lower Bollinger band near $82.30, where buyers would likely attempt to defend the broader uptrend from deeper correction.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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