FX.co ★ Der | CL/Crude Oil

West Texas Intermediate (WTI)—the benchmark price for U.S. crude oil—saw a slight recovery at the start of European trading, climbing back above the $86.00 mark. This rebound followed several days of sharp sell-offs, which drew in investors seeking attractive entry points. Despite this brief recovery, momentum has since waned, with prices failing to surpass the previous day’s high. This reflects a sense of caution among energy traders, who are closely monitoring geopolitical developments in the Middle East. The current market landscape is shaped by competing factors: while regional supply faces a serious threat, there are growing market concerns regarding a potential supply glut, alongside rising expectations for a de-escalation in diplomatic tensions. On the geopolitical front, reports of a U.S. strike targeting the Iranian island of Qeshm have kept risk premiums elevated; in response, Tehran has taken measures affecting maritime navigation systems near the island of Didmar—a strategic gateway to the Persian Gulf. Furthermore, sharp statements from senior Iranian military officials—including Brigadier General Kioumars Heidari, Deputy Commander of the Iranian Armed Forces—asserting that the Strait of Hormuz remains officially closed and that passage is permitted only by direct order from the high command, have failed to alleviate the market’s deep-seated concerns regarding potential supply disruptions. Nevertheless, the upward momentum in energy prices continues to face strong headwinds stemming from macroeconomic pressures and inventory dynamics. Market participants are increasingly focused on the possibility of diplomatic breakthroughs aimed at resolving the conflict in the Middle East and the protracted war in Eastern Europe—developments that, if realized, could pave the way for the normalization of regional energy flows. Beyond these supply-side headwinds, fundamental data also point to a worsening supply glut. Oil industry estimates from the American Petroleum Institute (API), followed by official government data, revealed a sharp increase in U.S. commercial crude oil inventories—rising by approximately 9 million barrels for the week ending November 6. This figure contradicted earlier market expectations of a decline in stocks, further fueling concerns over an oversupply. This inventory build-up coincides with a period in which U.S. domestic crude oil production has reached record levels. Despite ongoing regional conflicts, optimistic investors remain cautious while continuing to invest heavily in the oil market. From a technical perspective, West Texas Intermediate (WTI) crude oil prices remain in a short-term downtrend, continuing to trade below the 100-day simple moving average (SMA)—currently at $86.81 and trending downward. Momentum indicators further confirm this weak technical structure: the 14-day Relative Strength Index (RSI) is hovering in the lower range near 30, while the Moving Average Convergence Divergence (MACD) sits below the zero line, with a negative histogram signaling persistent downward pressure. The 50% Fibonacci retracement level ($85.61) currently serves as immediate structural support. Should the price fall below this level, it could decline further toward deeper technical support levels, such as the 61.8% Fibonacci retracement (approximately $81.26) and the 78.6% Fibonacci retracement (approximately $75.06). If the decline intensifies, an additional macroeconomic structural support level lies near $67.17. Conversely, the 100-day SMA ($86.81) acts as the first level of resistance, followed by the 38.2% Fibonacci retracement level ($89.96). The current downward trend will only be reversed by a strong breakout above these resistance levels, which would pave the way for further gains toward the 23.6% Fibonacci retracement (approximately $95.34). Reaching the major cycle high of around $104.04 remains a relatively distant target under current market conditions.