Oil prices rebound in early Tuesday trading after several days of losses. Brent oil currently trades near $101.80 a barrel while WTI oil trades near $96.70 a barrel. This rebound in oil prices was driven by traders covering bearish positions after recent sell-off. But the rebound so far is weak and does not confirm fresh recovery.
The market is now focused on possible talks between the U.S. and Iran during UN General Assembly this week. Any progress could ease fears of a wider supply disruption and put fresh pressure on oil prices. But the Houthis claimed new attacks on Riyadh and an Aramco facility in Yanbu.
The lower output from Sharara field in Libya also keeps the risk of supply disruption high. At the same time, Saudi Arabia has increased shipments through the Strait of Hormuz, which has eased immediate supply concerns. In my view, this mixed outlook may keep oil prices volatile until the diplomatic picture becomes clearer.
WTI Crude Oil Price Forecast: RSI Supports a Rebound From $93
The weekly chart for WTI crude oil shows that the price formed a high at $106.75 and produced a strong drop toward key support zones. Overall, the price has been consolidating within a wide range after the U.S.-Iran war. This range lies between $70 and $120.
A confirmed weekly close above $102.50 will open the way for a rally toward $120. On the other hand, a weekly close below $80.50 will push prices toward the $70 area. Despite the recent correction in the oil market, the RSI remains above the midline, which suggests positive momentum in the WTI crude oil market.
The 4-hour chart for WTI crude oil shows that prices remain in a strong bullish pattern despite the recent drop from the $106 area. The $104 level was the key resistance zone and WTI crude oil failed to break above this level.
The price recently hit the initial support at $93 but a confirmed break below this level will push the price toward the $87 area. But the RSI has reached the extremely oversold region, which suggests a rebound from the current support.
Brent Oil Price Forecast
Every new Brent Oil analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Brent Oil forecastsBrent Crude Oil Price Forecast: $100 Support Keeps Recovery in Play
The daily chart for Brent oil shows that prices dropped from the strong resistance near $113 and reached the initial support at $102. The next support remains at the 50-day SMA near $95. A break below $95 will likely push prices toward long-term support at $77.
However, the RSI has reached the midline on the daily chart, which suggests that prices may rebound from the current support.
The weekly chart for Brent oil also shows strong support around $100. If this support holds, prices may attempt to rebound toward $113 and $120 areas, which are important resistance zones.
What to Watch Next
Oil prices may remain volatile as hopes for talks between the U.S. and Iran compete with the risk of supply disruption in Saudi Arabia and Libya. WTI could rebound from $93 due to oversold conditions in the short term, but the broader recovery may remain weak unless the price closes above $102.50 on the weekly chart.
A break below $93 would expose $87 while a weekly close below $80.50 would shift the focus toward $70. Brent must hold the support zone of $95-$100 to recover to $113 and $120. A break below $95 would increase the risk of drop toward $77. Therefore, diplomatic developments and these key support levels will guide the next major move in the oil market.
