FX.co ★ Crude | CL/Crude Oil

West Texas Intermediate (WTI) crude oil futures on the New York Mercantile Exchange (NYMEX) faced renewed selling pressure on Tuesday, falling 1.5% to below $85.00 per barrel. The U.S. benchmark hovered near $84.25—a ten-week low reached on Monday—extending its significant decline. This movement was primarily driven by growing market optimism regarding a potential diplomatic breakthrough between the United States and Iran. Sentiment in the energy market stabilized as the confrontational rhetoric from Washington eased over the weekend. Analysts at MUFG noted that investor optimism was bolstered by U.S. President Donald Trump’s remarks in a CNN interview, in which he stated that the likelihood of ordering a new round of military strikes against Iranian targets is "very low," provided that ongoing negotiations continue to make tangible progress. However, MUFG pointed out that President Trump also indicated that a final resolution depends on the quality of the ultimate agreement; he explicitly stated that the key to progress lies in Tehran’s willingness to sign a "very strong deal." Market participants believe this subtle distinction is crucial in sustaining the recent decline in global geopolitical risk premiums. The drop in global oil prices intensified following the results of the U.S. midterm congressional elections, which saw the Democratic Party secure control of both the House of Representatives and the Senate. The Democratic majority in both chambers has bolstered market expectations that the U.S.-Iran conflict could be resolved through negotiations, as lawmakers have signaled their intent to exercise parliamentary oversight to limit the executive branch’s funding for escalating military operations. Senate Minority Leader Chuck Schumer (D-NY) articulated this legislative stance, stating that Democrats intend to leverage Congress’s power of the purse to bring an end to the conflict. He further noted that some Republican lawmakers have joined this effort, aiming to prevent the President from taking military action without formal congressional approval. These political developments—coupled with reports of a potential framework agreement that would allow for controlled uranium enrichment—have significantly eased market concerns regarding long-term energy supply disruptions in the Middle East. From a technical perspective, the daily chart for West Texas Intermediate (WTI) crude oil shows a clear downward trend. The spot price is currently hovering around $84.81—well below the 20-day exponential moving average (EMA) of $93.36. This key moving average continues to act as a strong dynamic resistance, thwarting any attempts at a rebound following a sharp reversal from highs above $100.00. The overall technical structure exhibits a clear pattern of lower highs and lower lows, further reinforced by a decisive breakdown below the swing low of October 6 ($86.32). Meanwhile, the 14-day Relative Strength Index (RSI) sits at approximately 34—indicating persistent bearish momentum while remaining above the oversold zone—which suggests that although sellers maintain structural dominance, the decline could stabilize if short-term selling pressure eases. On the upside, immediate resistance lies at $86.32 (previously acting as support), followed by the psychological level of $90.00, while the 20-day Exponential Moving Average (EMA) at $93.36 serves as a robust barrier against further gains. On the downside, initial dynamic support is found at the August 28 high of $83.11, with further bearish targets pointing toward the August 26 low of $79.28.