WTI Price Forecast: Growing internal war risks in Middle East support recovery to near $78

West Texas Intermediate (WTI), futures on NYMEX, extends Thursday’s recovery move slightly to near $77.80 during the day. The Oil price underperformed in the last two weeks on hopes of the Strait of Hormuz reopening, a critical chokepoint to almost 20% of global energy supply.

Last weekend, United States (US) President Donald Trump also said in a post on Truth Social that he suspended planned strikes on Iran as it has agreed to “Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat”.

However, the proposed US-Iran deal appears to be gripped by uncertainty, following remarks from Tehran that it is close to finalizing a proposal with Oman aiming for joint management of the chokepoint, resulting in a recovery in oil prices. The Iran-Oman proposal is expected to face backlash from global leaders who are supporting freedom of navigation through the passage.

Meanwhile, growing friction between Iran-aligned Houthis and Saudi Arabia, which started after the first ones declared the Saudi Arabia blockade, has fuelled fears of a prolonged energy supply disruption, a scenario that boosts oil prices.

Earlier in the day, a report from The Guardian showed that Saudi Arabia will likely step up its military attacks on Houthis for attacking the Najran province and Yemeni government troops.

WTI Technical Analysis

Trend: The WTI US Oil trades at around $77.80, maintaining a bearish near-term bias as it holds beneath the 20-day exponential moving average (EMA) at $79.32.

Momentum: The price retreat from the recent highs leaves spot WTI capped by this short-term trend indicator, while the Relative Strength Index (RSI) at 46.44 sits in neutral territory, hinting at cooling downside momentum but not yet signaling a bullish reversal.

Resistance: On the topside, immediate resistance is located at the 20-day EMA at $79.32, which needs to be reclaimed to ease the current bearish pressure and open the way towards the July 31 high at $85.11.

Support: Looking down, the August 5 low at $73.51 is the key support level; a break below the same would expose the oil price to the July low at $67.09.