WTI expected to trend higher in near term

WEST Texas Intermediate (WTI) crude prices have staged a modest recovery since the start of the year, rising about 4 per cent year-to-date at the time of writing. After briefly dipping to the key support level of US$56 per barrel on Jan 7, prices have since climbed steadily to around US$60 per barrel. The latest upswing reflects a rebuilding of geopolitical risk premium, as unrest in Iran offsets the potential increase in Venezuelan oil exports.

Renewed protests in Iran have raised concerns over potential supply disruptions from the Opec producer, particularly given the strategic importance of the Strait of Hormuz. This geopolitical tension has overshadowed the possible supply boost from Venezuela, where the post-Maduro government is reportedly preparing to release up to 50 million barrels of previously sanctioned oil for export to the United States, according to comments from President Donald Trump.

Meanwhile, supply risks extend beyond the Middle East. Ongoing Ukrainian strikes on Russian energy infrastructure and the possibility of tougher US sanctions on Moscow’s oil exports add another layer of uncertainty to the global energy outlook.

From a technical perspective, WTI oil prices have flashed several bullish signals. Prices have broken above a downtrend channel that has been intact since late July 2025 and has surpassed the recent resistance at US$59 per barrel. This breakout is reinforced by a move above the 50-day simple moving average, a key indicator of medium-term momentum, that had previously capped price gains since September 2025. In terms of technical indicators, the Moving Average Convergence Divergence (MACD) momentum oscillator also displays increasing momentum following a bullish divergence signal, with the MACD crossing above the zero line for the first time since the end of September 2025.

In summary, WTI crude oil appears poised for a further near-term rebound. Supportive technical signals, coupled with escalating geopolitical risks, suggest prices could advance towards a retest of the US$65 per barrel level, a significant resistance zone last seen in September 2025.

The writer is senior research analyst at Phillip Securities Research