Oil Price Forecast: WTI and Brent Target $120 on Middle East Risks
By Muhammad Umair | Updated: Jul 23, 2026
Key Points
- WTI crude oil may rise toward $109 after breaking above $85.
- Brent crude oil may extend its rally toward $120.
- Middle East supply risks continue to support oil prices.
Market Overview
Oil prices surged on Thursday due to escalating conflicts in the Middle East. Brent crude oil reached approximately $96 per barrel, while WTI oil surpassed $88. The U.S. conducted further strikes on Iran, which has threatened to close the Strait of Hormuz, raising concerns about significant supply disruptions.
The conflict has also affected the Red Sea, where Yemen's Houthis have attacked Saudi oil tankers and declared a naval blockade against Saudi Arabia. This situation poses a second major risk to global energy flows, potentially leading to increased shipping, fuel, and insurance costs, as well as delays in deliveries to Europe and Asia.
Inventory and Price Dynamics
Despite a reported increase of 2 million barrels in U.S. crude inventories, the impact of this data may be diminished due to the ongoing risks to major shipping routes. Oil prices are likely to continue rising if tensions in the Strait of Hormuz and the Red Sea persist.
WTI Technical Analysis
WTI crude oil has broken above the $85 resistance level, indicating a potential rally towards $109 if it maintains support above $80. The daily chart shows strong support around $66, and a rebound from this level suggests a bullish price structure. A break above $87 could further propel prices towards $109 in the near term.
Brent Technical Analysis
Brent crude oil has shown bullish momentum after rebounding from the $72 support level. The price has surpassed the $90 resistance and is targeting $110. The 50-day simple moving average (SMA) is above the 200-day SMA, indicating strong short-term momentum. As long as the price holds above $90, further gains towards $110 are likely.
Long-Term Outlook
The monthly chart for Brent crude oil indicates a failure to break below the key level at $70, initiating a strong rally. The rebound in July has recovered 90% of the losses from June, with a break above the June high of $102.12 suggesting further price increases. The geopolitical developments in the Middle East are expected to continue supporting oil prices.