WTI: Bounce from $88.7, but the market still has several hurdles ahead

WTI bounced sharply from the $88.7 area and closed the day at $92.96. The broader bullish structure is still intact, but the rebound is not yet confirmed as a continuation of the uptrend. The key question now is whether price can reclaim $93.35–94.45 and, more importantly, the $95.64–96.02 area. This is where several technical levels converge, together with the middle of the rising channel.

Daily chart: the rising channel is still holding

The daily chart continues to show a rising channel that has developed from the summer low around $67. During the latest correction, WTI dropped to $88.67, reaching an area where several technical supports converge.

This was followed by a strong rejection of the lows. The latest daily candle opened around $89.89, dropped to $88.71, but then reversed sharply and closed at $92.96.

That is a move of more than $4 from the daily low and shows that buyers stepped in aggressively around the $88–89 area.

However, there is an important distinction between a bounce from support and a confirmed continuation of the trend. Price is still below several resistance levels that need to be reclaimed one by one.

$93.35 is the first important hurdle

The first significant level is around $93.35, which corresponds to the 50% Fibonacci retracement of the latest move from $88.67 to $98.02.

Above that comes $94.45, the 61.8% Fibonacci retracement.

The more important area, however, is $95.64–96.02. The $95.64 level is a horizontal resistance, while $96.02 is the 78.6% Fibonacci retracement.

There is another important factor here: the middle of the rising channel, which is currently located roughly around $96–97.

This makes the $95.6–97 area particularly important. If WTI reaches this zone, I would be watching not only for a breakout, but also whether price can actually hold above it.

4H chart: first signs of recovery, but the correction structure is still there

The 4H chart gives us a clearer look at the latest move.

After being rejected around $98, WTI formed a sequence of lower highs and lower lows and eventually dropped to $88.67.

This is where the market found support and produced a strong rebound.

Interestingly, the low also came very close to the 4H SMA200, currently around $89.6. The combination of these technical factors helped create a strong support area.

From the low, price reclaimed $90.88 and then $92.24, corresponding to the 23.6% and 38.2% Fibonacci levels. Price is currently trading just below the 50% retracement at $93.35.

So on the 4H chart we can see the first attempt to change the short-term structure, but it is still too early to call this a confirmed return to the previous highs.

For the recovery to continue, I would watch the following sequence:

$93.35 → $94.45 → $95.64–96.02 → $98.02.

Each successful breakout and hold above these levels would strengthen the recovery structure.

What if price turns lower again?

The first support is now around $92.24, followed by $90.88.

If those levels are lost again, attention would return to the recent low at $88.67.

This is where the distinction between a normal pullback and a structural breakdown becomes important.

A brief move below $88.67 followed by a quick recovery could still represent a liquidity sweep within the broader rising structure. A sustained break below this area, however, would put the next major level around $86.34 into focus.

From the daily perspective, I would therefore consider roughly $86–89 the key support zone for the broader bullish structure.

What would a breakout above $96–97 change?

The upside scenario becomes more interesting if WTI manages to reclaim $95.64–96.02 and then breaks above the middle of the rising channel around $96–97.

That would put the previous swing high at $98.02 back into focus.

A break above $98.02 would then open the way toward the upper part of the rising channel and potentially the $107 area, where the previous major high and PWH around $107.41 are located.

But that is the second stage of the scenario. First, the market has to deal with the $95.6–97 area.

Two timeframes, one picture

The daily and 4H charts are currently telling a very similar story, just from different perspectives.

Daily chart: The broader rising structure remains intact, and the latest bounce started from the $88–89 support area.

4H chart: The short-term correction from $98 reached $88.67 and the market is now attempting a recovery.

For now, I would describe this as a bounce within the broader uptrend rather than a confirmed new bullish impulse.

The most important area to watch is therefore $93.35–96.02, with the middle of the channel extending the key resistance zone toward roughly $97.

Fundamentals: inventories remain supportive, geopolitics still dominates

From the fundamental side, the oil market remains supported by relatively tight supply conditions. The latest EIA report showed U.S. commercial crude inventories falling by 0.6 million barrels to 423.4 million barrels for the week ending September 11, marking a third consecutive weekly decline. At the same time, gasoline inventories increased by 0.8 million barrels to 207.7 million, while distillate stocks rose by 1.6 million barrels to 107.9 million. Refinery utilization remained high at 96.8%. MarketHoundLab

The Strategic Petroleum Reserve (SPR) is another important factor. EIA data show the SPR at roughly 285 million barrels, following another weekly decline. That leaves the U.S. with considerably less strategic inventory than before the current drawdown cycle began. eia.gov

The bigger fundamental driver, however, remains the geopolitical situation in the Middle East. Uncertainty around Iranian oil flows, the Strait of Hormuz and alternative export routes continues to keep a risk premium in crude prices. Recent developments have provided some relief, including the partial restoration of Saudi Arabia's East-West pipeline and indications that additional oil flows could return, but the situation remains highly fluid. Reuters also reported that Saudi Arabia had resumed operations on the pipeline while exports through Hormuz remained an important variable for the market. Reuters

So fundamentally, the picture remains mixed but still supportive of elevated oil prices: U.S. commercial inventories are drawing, product inventories remain relatively tight, and the SPR is at historically low levels, while any improvement in Middle East supply flows could simultaneously remove part of the geopolitical premium. This is why the reaction around the key technical levels remains particularly important.

My technical scenario

If the current rebound holds, the first targets are $93.35 and $94.45. Above those levels comes the key $95.64–97 area, where horizontal resistance, Fibonacci levels and the middle of the rising channel come together.

A breakout and hold above $96–97 would open the way toward $98 and potentially, after that, the upper part of the channel around $107.

On the other hand, rejection from the $93–97 area could send WTI back toward $90.88 and $88.67. A break below $88.67 would bring $86.34 back into focus, near the lower boundary of the broader rising structure.

For now, the most interesting thing to watch is the price reaction at $93.35 → $94.45 → $95.64–97. That reaction should tell us whether the bounce from $88.7 was the beginning of another bullish leg or simply a correction before another move lower.