Oil Price Forecast: WTI and Brent Slip as Iran Keeps Talks Open

Oil prices eased in early Thursday trading after a sharp rebound on Wednesday. Brent oil slipped to about $102 a barrel, while WTI oil fell below $92. Brent oil gained 3.87% on Wednesday after the president of Iran said that Tehran would not surrender to U.S. pressure. Iran also said that it remained open to talks but the two sides are still far apart. That uncertainty keeps the focus on the risk to oil shipments through the Strait of Hormuz. U.S. inventory data also added pressure on prices. The Energy Information Administration reported that crude stocks increased by 3 million barrels last week, while traders had expected the decline. The larger stockpile could limit further gains in oil prices. Gasoline and distillate stocks fell, which suggests that fuel supplies remain tight. For now, traders are weighing the U.S. crude build against the risk of continued disruption in the Gulf. Next up U.S. Dollar Rallies As 10-Year Treasury Yield Tests New Highs: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts · EUR/USD · 4 min read WTI Oil Forecast: $94 Resistance and $87 Support The daily chart for WTI crude oil shows that the price reached a high at the $104 resistance level and then dropped sharply. This drop pushed the price below $93, increasing uncertainty in the short term. The most important immediate support remains at $87, defined by the neckline of the inverted head and shoulders pattern. The 50-day SMA also highlights this support. A break below $87 will likely push WTI crude oil prices towards the $82 area, defined by the 200-day SMA. On the other hand, if WTI crude oil rises above $94, it will likely open the way for another rally towards $104. The RSI remains at the midline, showing uncertainty about the short-term direction. The important $87 support is also highlighted in the 4-hour chart below. A break below $87 will likely negate the positive structure in the short term and open the way for further drop towards the $80 area. On the other hand, a strong recovery above $94 will open the way for another rally towards the $104 region. The RSI has already reached the oversold level on the 4-hour chart, suggesting a positive move in the short term. Brent Oil Price Forecast Every new Brent Oil analysis as it publishes, today's technical signal and key levels, live price — on one page. See all Brent Oil forecasts Brent Oil Forecast: $103.50 Resistance and $98.50 Support The daily chart for Brent oil shows that the price rebounded on Wednesday and gained 3.87% to move above the $102 area. This rebound indicates strength in the Brent oil market in the short term. However, another drop below $98.50 will indicate further downside toward the 50-day SMA near $95. The direction for Brent oil remains uncertain in the short term. If prices continue to rally above $103.50, it will likely indicate a strong rally toward the $113 area. On the other hand, a break below $95 will likely open the way for a further drop toward the $77 region. As long as Brent oil remains above $77, the price direction remains positive. But the volatility in oil prices remains high after the US-Iran war. The daily chart below shows that the price remains above the pre-war levels but the volatility is strong. Brent oil spiked from nearly $70 to $120 after the U.S.-Iran war began. But prices retreated towards $70 after the war and rebounded above $100 again. This indicates that volatility in Brent oil remains high. A break above $120 will indicate a strong surge in the oil market. On the other hand, $80 remains strong support for Brent oil. What to Watch Next for WTI and Brent Oil prices may continue to show uncertainty as traders watch the talks between the U.S. and Iran and shipments through the Strait of Hormuz. The rise in U.S. crude stocks could slow the rebound while falling fuel stocks offer some support. In my view, WTI needs to break above $94 and Brent above $103.50 before the rebound of Wednesday can continue. This breakout would suggest $104 for WTI and $113 for Brent. A break below $87 in WTI or a break below $95 in Brent will suggest deeper decline in the oil market. Read more: WTI and Brent Rebound Despite U.S.-Iran Talk Hopes