Oil Price Forecast: Saudi Pipeline Outage Puts $120 in Focus

• Saudi Arabia's East-West pipeline, which carries 4 million barrels per day to the Red Sea for exports bypassing Hormuz, remains offline following fresh attacks in the region
• WTI crude broke above its triangle pattern at $86 in August 2026 and now tests $104 resistance, with technical indicators suggesting a move toward $110 if this level breaks
• Brent crude has gained approximately 10.70% in the past week and is consolidating near $113 resistance, with analysts targeting $120 if bullish momentum continues above $100 support

Summary

Oil prices surged following attacks on Saudi Arabia's East-West pipeline, raising significant supply concerns. The damaged pipeline, with a capacity of 4 million barrels per day to the Red Sea, remains offline and is crucial for exports bypassing the Strait of Hormuz. WTI crude reached $102, while Brent hit $108 as of September 15, 2026.

Key Market Implications:

The prolonged outage could remove up to 4% of global oil supply from the market. Shipping traffic through the Strait of Hormuz has dropped sharply, intensifying supply fears. Further regional conflicts could drive prices higher, while a quick pipeline restoration and resumed Hormuz shipping could ease pressure.

Technical Analysis:

WTI Crude: Price broke a triangle pattern at $86 in August 2026 and is now testing $104 resistance. A breakout could push prices toward $110, with support at $92.50-$96. The 50-day SMA remains above the 200-day SMA, indicating bullish momentum, though RSI shows overbought conditions suggesting potential consolidation.

Brent Crude: After breaking above $95, Brent is testing $113 resistance. A breach could target $120, with support at $102. Last week's 10.7% gain reflects strong bullish momentum, though overbought RSI levels may trigger near-term corrections.

Bottom Line:

The outlook remains bullish as long as WTI holds above $92.50-$96 and Brent stays above $100. Supply risks from Middle East tensions continue to support elevated prices, though technical indicators suggest possible short-term consolidation before further upside.