WTI Crude Oil Forecast: Prices Rally to $73.85 Amid Hurricane Milton Impact

Further supporting the bullish sentiment in oil markets are concerns about potential supply disruptions in the Middle East. Heightened tensions between Israel and Iran have kept investors wary, with the Israeli Defense Minister recently warning that any strike against Iran would be “lethal, precise, and surprising.” President Joe Biden engaged in a 30-minute call with Israeli Prime Minister Benjamin Netanyahu, where he emphasized restraint, but analysts suggest that global concerns persist about potential spillovers affecting oil production and distribution.

$WTI has pushed down, back to the support. The price closed within the zone but with one big red candle which I didn't feel comfortable about and exited early. I'll look for another opportunity. #CrudeOil pic.twitter.com/513RHabeec

— Tradinvestor (@Tradinvestlysis) October 10, 2024

EIA Downgrades Demand Forecast, But Near-Term Outlook Remains Strong

Despite the bullish momentum, the U.S. Energy Information Administration (EIA) revised its demand forecast for 2025 downward, citing weaker economic activity in both China and North America. The updated outlook, released on Tuesday, has added some bearish sentiment to the broader market. Nevertheless, crude oil inventories for the previous week grew by 5.8 million barrels, surpassing analysts’ expectations but still falling short of preliminary industry estimates.

According to JPMorgan, oil demand has shown signs of strength in recent weeks. Analysts noted that U.S. gasoline demand spiked by 800,000 barrels per day (kbd) compared to the prior week. Similarly, flight activity across Asia rebounded following disruptions from multiple typhoons, pushing daily flight activity in China to an eight-week high. This resurgence in travel demand is likely to support oil prices in the short term, with additional upward pressure expected from weather-related demand in the coming months.

WTI Crude Oil Price Forecast: Bullish Momentum Amid Positive Technical Indicators

WTI Crude Oil is trading around $73.82, maintaining a bullish outlook above its immediate support at $73.40. The recent formation of a bullish engulfing pattern on the 2-hour chart suggests that the uptrend could continue. WTI has also crossed above the 50-day Exponential Moving Average (EMA), now acting as support at $73.78.

Oil edges higher after a two-day decline as traders watched for an Israeli response to Iran’s missile attack early last week, while US crude stockpiles expanded the most since April https://t.co/F7ZTWcQKH9

— Bloomberg Markets (@markets) October 10, 2024

The next immediate resistance level is at $74.43, with further upside targets at $75.14 and $76.05. If the $74.43 resistance is broken, a bullish extension toward $76.05 could occur. On the downside, key support levels are at $73.40, $72.27, and a crucial support at $71.52. The RSI, currently at 49, reflects neutral sentiment, but a move above 50 would affirm bullish momentum.

Key Insights:

• Bullish Pattern Formation: A bullish engulfing pattern supports a potential continuation of the upward trend.

• Resistance Levels to Watch: Breaking above $74.43 could lead to further gains towards $75.14 and $76.05.

• Key Support Levels: Immediate support stands at $73.40, with additional safety nets at $72.27 and $71.52.

Overall, WTI Crude Oil seems poised for a breakout if it can hold above the $73.78 level, with potential upside targets at $75.14 and $76.05. However, a break below $73.40 could indicate bearish pressure, pulling prices lower towards $72.27.