WTI crude oil price jumped to $112 on Friday, continuing a bullish trend that started in late February when Donald Trump and Benjamin Netanyahu launched their war against Iran. It has flipped that of Brent, which was trading at $109.
Polymarket traders see WTI crude oil price hitting $120
Traders believe that the WTI crude oil price will continue rising in the coming weeks. A Polymarket poll with over $4 million in assets places the odds of it soaring to $120 this month at 69%. Odds of the price rising to $130 rose to 41%.
The rising odds of the WTI crude oil price soaring is because traders predict that the ongoing Iran war will continue for longer than what Donald Trump expects and the Strait of Hormuz closure remaining.
In his speech on Wednesday, President Trump said that he expects the war will end in the next two weeks. However, geopolitical experts believe that the war will last for longer than that as Iran is not in a hurry to end the war. A Polymarket poll shows that the odds of a ceasefire happening this month have dropped to 22%.
While Iran would want to end, officials believe that having a premature ceasefire will lead to another attack in the next few months, a process that Israel calls mowing the lawn. Instead, the country wants a concrete end to the war and will use the Strait of Hormuz closure for its leverage.
There is a risk that Red Sea oil traffic will also be cut in the next few months as the US continues to attack civilian infrastructure. The Houthis launched an attack on Israel last week and threatened to intensify it in the near term. Such a move would affect the 7 million barrels a day that Saudi Arabia is exporting daily.
Additionally, Iran may also attack more oil fields in the Middle East if the US intensifies its attacks in the region.
All these factors have led to a surge in oil demand from the United States, which explains why the WTI premium has continued rising. This demand is coming from Asian countries like South Korea and Japan, which normally rely on Middle East sources. It is also coming from Latin American and European countries.
Crude oil prices forecast: Technical analysis
WTI crude oil price chart | Source: TradingView
The three-day timeframe chart shows that the WTI crude oil price formed a double-bottom pattern at $55 in May and December last year. A double-bottom is one of the most common bullish reversal signs in technical analysis.
The price has jumped above the descending trendline that connects the highest swings in September 2023, January and June last year. Moving above that level confirmed the bullish outlook.
The price has now formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. It remains substantially higher than these averages, while the Relative Strength Index (RSI) and the MACD have continued rising.
Therefore, the price will likely continue rising as bulls target the next key resistance level being at $120. A move above that level will point to more gains, potentially to $130. The price will then reverse later this year when the war ends.
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