WTI Price Forecast: More downside is likely if Oil falls below $67
West Texas Intermediate (WTI), futures on NYMEX, trades 1% higher to near $69.40 during the European trading session on Tuesday. The oil price gains after reports that Iran attacked at least two commercial ships transiting through the Strait of Hormuz, a vital passage to almost one-fifth of global energy supply, renewing fears of supply disruptions.
According to an Axios report, Iran fired at least two missiles at commercial ships transiting through the Hormuz. Two commercial ships were hit and suffered significant damage, but no casualties were reported, Bloomberg reported.
While the impact of the event is expected to be limited, as the United States (US) has not delivered any remark regarding the matter, suggesting that the ceasefire with Iran remains intact.
However, US President Donald Trump threatened to attack Iranian infrastructure on Monday if it doesn’t finalize a deal soon.
In response, Iran’s Foreign Minister Abbas Araghchi has warned, “Negotiations on a final deal will not commence if threats continue. Honour your signature.”
Meanwhile, the announcement of a hike in the overall oil output by the OPEC+ has increased the global supply, a scenario that weighs on oil prices.
WTI technical analysis
Bias: WTI US Oil trades higher at around $69.29 at press time. However, the index maintains a bearish near-term bias as spot prices hold well below the 20-day Exponential Moving Average (EMA) at $74.27.
Momentum: The separation between price and the EMA suggests sellers remain in control, while the Relative Strength Index (RSI) at 31.79 hovers just above oversold territory, hinting that downside momentum is still dominant but approaching levels where selling pressure could begin to moderate.
Resistance: On the topside, the immediate resistance is $70.00, followed by the 20-day EMA near $74.27.
Support: The Oil price might enter a fresh downside leg if it breaks below the July 2 low at $67.09. A downside move below $67.09 would expose the oil price to the February 26 low at $63.58.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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