WTI Crude Oil has bounced back, currently trading at $62.45 per barrel after dropping nearly 5.3% due to easing tensions between the US and Iran. Both countries are open to talks, which lessens concerns about military conflict. The technical outlook is positive. A bullish crossover of the 21-day and 50-day simple moving averages (SMAs) indicates an upward trend. The Average Directional Index (ADX) is at 32.81, showing a strong trend, while the Relative Strength Index (RSI) remains bullish.

WTI Reclaims Key Moving Averages

WTI has moved above its key moving averages, giving a short-term bullish outlook. If it stays above the 200-day SMA at $61.95, it might retest the January 29 high close to $66. However, a drop below $61.95 could lead to a pullback to the 21-day SMA at $60.47. WTI Oil prices are influenced by supply and demand. Factors like global growth, political instability, and the value of the US Dollar play a role. Weekly oil inventory reports from API and EIA also affect prices. OPEC’s decisions on production quotas can change supply and pricing. Looking back to early 2025, WTI crude oil showed a strong technical outlook as it rose above $62 per barrel. The bullish crossover between the 21-day and 50-day SMAs suggested that the upward trend was gaining strength. Although geopolitical tensions were a concern, the technical indicators pointed towards further gains. This momentum continued throughout the year, pushing prices past the $66 resistance level. As of February 3, 2026, WTI is trading near $78 a barrel, boosted by a tighter market compared to a year ago. Trends established in 2025 have accelerated due to new economic and supply-side changes.

Current Market Dynamics

Robust global demand is shaping the current market dynamics. The International Energy Agency (IEA) recently raised its 2026 demand growth forecast to 1.5 million barrels per day, mainly because of the recovery in international air travel and strong industrial activity in emerging Asian markets. This stable demand gives prices a solid foundation, unlike the uncertain economy of early 2025. On the supply side, OPEC+ continues to exercise significant production discipline, maintaining output quotas set late last year to ensure market stability. Furthermore, the growth of U.S. shale oil production has slowed, with output steady around 13.2 million barrels per day, according to the latest EIA data. This slower growth in non-OPEC supply helps keep global inventories in check. This week’s inventory data shows market tightness, with the EIA reporting a 3.1 million barrel decline in U.S. commercial crude stockpiles. This surprised analysts who expected only a 1.5 million barrel drop. It marks the third week of declining inventories, indicating that consumption is outpacing production, contrasting with the balanced levels observed in 2025. Unlike last year, when diplomatic talks eased market tensions, renewed geopolitical risks are now influencing prices. Recent drone attacks on oil infrastructure in the Middle East highlight the vulnerability of key supply routes, adding an extra layer of support that was missing when prices were in the low $60s. In this bullish environment, traders should pay attention to the growing open interest in out-of-the-money call options, specifically those with strike prices between $80 and $85 for April expiration. Using strategies like bull call spreads can take advantage of the strong upward momentum. The technical and fundamental factors now align more for a price increase than they did at this time last year. Create your live VT Markets account and start trading now.

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