WTI crude oil price stalls below $100 as ADX points to a retreat

The WTI crude oil price continued its rebound and was nearing the important resistance level at $100 as tensions between the United States and Iran continued. It rose to $97, up sharply from this month's low of $79.

Contentious US-Iran ceasefire continues

The WTI crude oil price continued rising this week as the contentious US-Iran ceasefire continued.

In a statement on Saturday, President Donald Trump canceled a trip by his top negotiators to Pakistan for talks after it became clear that Iranians would not show up. It was the second time that this happened in a week.

An Axios report on Monday said that Iran had made an offer to the United States, which would be bearish for crude oil prices. It suggested that the two sides postpone all nuclear talks in exchange for reopening the Strait of Hormuz.

Donald Trump and his national security team met to discuss the proposal, with some officials expressing doubt about its happening. Senator Lindsey Graham, who is close to the president, rejected the deal, while Secretary of the State Marco Rubio said that the US will not accept a deal in which Iran continues its control of the Strait of Hormuz.

Trump hopes that the ongoing blockade will push Iran to capitulate and rush to seek a deal as its storage fills. The challenge, however, is that Iran still has more storage room to go. A report by Kpler said that the country’s storage has 22 days to go, which is relatively lengthy.

Iran has other options to prevent shutting the operations when the storage runs out, including letting it flow to the ocean. It may also launch a preemptive strike against Israel to provoke the US into a war it does not want to fight.

The US would then respond by bombing Iranian crucial infrastructure, which would push it to attack other infrastructure in the region, including countries like Saudi Arabia and the United Arab Emirates (UAE). 

In a recent note, Iran’s speaker noted that the country had more cards than the United States, including bombing pipelines in the region and closing the Red Sea, potentially using the Houthis.

These are the main reasons why top Wall Street companies are boosting their crude oil forecast. Goldman Sachs and Citigroup boosted their forecasts for the year, citing the ongoing inventory draw from the US. Goldman Sachs predicts that oil will average $90 this year.

A Polymarket poll estimates that there are 41% odds that oil prices will jump to $120 in May this year.

Still, the risk for crude oil prices is that Trump has mastered the art of market manipulation, meaning that he may announce something just to cause a reversal.

WTI crude oil price technical analysis 

Crude oil price chart | Source: TradingView 

The daily timeframe chart shows that the WTI crude oil price has risen in the past few weeks, moving from a low of $79 to the current $97.50.

It has jumped above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator. These indicators point to more gains later this week.

However, the West Texas Intermediate (WTI) has dropped to 23 from this month's high of 60. A falling ADX indicator is a sign that the strength of the rally is fading.

Therefore, there is  a possibility that it will retreat in the near term. If this happens, the price may drop to the support at $90 and then resume the uptrend.The WTI crude oil price continued its rebound and was nearing the important resistance level at $100 as tensions between the United States and Iran continued. It rose to $97, up sharply from this month's low of $79.

Contentious US-Iran ceasefire continues

The WTI crude oil price continued rising this week as the contentious US-Iran ceasefire continued.

In a statement on Saturday, President Donald Trump canceled a trip by his top negotiators to Pakistan for talks after it became clear that Iranians would not show up. It was the second time that this happened in a week.

An Axios report on Monday said that Iran had made an offer to the United States, which would be bearish for crude oil prices. It suggested that the two sides postpone all nuclear talks in exchange for reopening the Strait of Hormuz.

Donald Trump and his national security team met to discuss the proposal, with some officials expressing doubt about its happening. Senator Lindsey Graham, who is close to the president, rejected the deal, while Secretary of the State Marco Rubio said that the US will not accept a deal in which Iran continues its control of the Strait of Hormuz.

Trump hopes that the ongoing blockade will push Iran to capitulate and rush to seek a deal as its storage fills. The challenge, however, is that Iran still has more storage room to go. A report by Kpler said that the country’s storage has 22 days to go, which is relatively lengthy.

Iran has other options to prevent shutting the operations when the storage runs out, including letting it flow to the ocean. It may also launch a preemptive strike against Israel to provoke the US into a war it does not want to fight.

The US would then respond by bombing Iranian crucial infrastructure, which would push it to attack other infrastructure in the region, including countries like Saudi Arabia and the United Arab Emirates (UAE). 

In a recent note, Iran’s speaker noted that the country had more cards than the United States, including bombing pipelines in the region and closing the Red Sea, potentially using the Houthis.

These are the main reasons why top Wall Street companies are boosting their crude oil forecast. Goldman Sachs and Citigroup boosted their forecasts for the year, citing the ongoing inventory draw from the US. Goldman Sachs predicts that oil will average $90 this year.

A Polymarket poll estimates that there are 41% odds that oil prices will jump to $120 in May this year.

Still, the risk for crude oil prices is that Trump has mastered the art of market manipulation, meaning that he may announce something just to cause a reversal.

WTI crude oil price technical analysis 

Crude oil price chart | Source: TradingView 

The daily timeframe chart shows that the WTI crude oil price has risen in the past few weeks, moving from a low of $79 to the current $97.50.

It has jumped above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator. These indicators point to more gains later this week.

However, the West Texas Intermediate (WTI) has dropped to 23 from this month's high of 60. A falling ADX indicator is a sign that the strength of the rally is fading.

Therefore, there is  a possibility that it will retreat in the near term. If this happens, the price may drop to the support at $90 and then resume the uptrend.