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WTI giving back some of Thursday’s gains, tests below $88.00

October 20, 2023| Forex Market


  • Crude Oil prices are seeing a tentative step back after tipping into a 13-day high early on Friday.
  • WTI tested back into the $88.00 handle, but plenty of bidding strength remains as markets weigh geopolitical concerns.
  • Bidding interest remains high in Crude Oil, and downside moves will face continued upside pressure.

West Texas Intermediary (WTI) Crude Oil prices are on the lower side for Friday, albeit slightly as ongoing geopolitical tensions in the Gaza Strip threaten to spill over and global production continues to flub barrel demand.

Thursday’s run up the charts in spot Crude prices saw a mild extension into early Friday, sending WTI into $89.64 to retest its highest bids in almost three trading weeks before a relief pullback pinged just south of $88.00 per barrel.

Price action is now firming up in the midrange with Crude Oil bids testing back and forth near the $88.00 neighborhood as energies traders weigh their options heading into the weekend market close.

Geopolitical tensions between Israel and Hamas continue to weigh on oil markets as investors fret over a potential spillover that could destabilize the region near the Strait of Hormuz; while Israel and Palestine are not major players in Crude Oil markets, the nearby Strait of Hormuz is a key chokepoint for global oil supply, seeing a fifth of all oil supply pass through its waters.

It was revealed this week that the US is set to lift sanctions on Venezuelan crude oil exports in a bid to prop up woefully under-supplied global oil markets, which took WTI lower in the mid-week, but Venezuelan oil producers remain drastically below capacity, and it will take some time for Venezuelan barrels to begin eating away at undersupply.

WTI Technical Outlook

Crude Oil has continued a healthy rebound from October’s early dip into $80.63, with WTI bids still up around 9% from the month’s early swing low, and a bullish continuation will pave the way for a run at September’s high bids near $94.00.

The downside is getting capped off by the 50-day Simple Moving Average, currently pushing higher from just south of $86.00, and daily candlesticks have so far been unwilling to push too far past the technical barrier, with the 200-day SMA rolling over into a bullish stance from $78.00

WTI Daily Chart

WTI Technical Levels


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