WTI remains under pressure as $84.50 support faces a critical test

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WTI bears face persistent supply uncertainty

Washington's cautious stance reduces the geopolitical risk premium

The U.S. president announced his intention to refrain from expanding military operations following appeals from representatives of Middle Eastern countries, including Qatar's prime minister. These statements strengthened expectations of a gradual easing of tensions in the Persian Gulf and a recovery in international oil supplies. According to Reuters, WTI futures fell approximately 1.8% to $85.20 on the morning of November 10, while Brent lost 1.7%, declining toward $90.99.

Brent ended the previous session with a 5.85% loss, recording its sharpest daily decline in recent months. Additional pressure comes from a reduction in the geopolitical risk premium, as investors increasingly price in the possibility of an end to the conflict and the normalization of oil shipments through the Strait of Hormuz. However, the scale of the current decline suggests that the market is already pricing in a relatively optimistic scenario for a diplomatic settlement, despite the absence of any concrete agreements.

Shipping disruptions complicate the outlook for oil exports

Meanwhile, the situation in the Middle East remains considerably more complicated than oil price movements suggest. Despite the U.S. administration's decision to temporarily refrain from further strikes against Iran, Washington intends to maintain its naval blockade of the Strait of Hormuz. At the same time, reports of attacks on merchant vessels continue, confirming the persistent threat of further disruptions to export shipments.

Additional uncertainty comes from statements by Iranian officials, who deny any significant progress in negotiations and continue to insist on their own conditions for ending the conflict. Thus, a substantial gap remains between Washington's more cautious stance and the actual prospects for reaching an agreement.

Meanwhile, the recovery in production across OPEC countries is gradually increasing available supply. According to the latest Reuters survey, the group's oil output rose in October, primarily due to Saudi Arabia, Kuwait, and Iraq, although producers' export capacity remains constrained by transportation problems.

The recovery in shipments through alternative routes is also noteworthy: according to IEA estimates, crude oil exports from Persian Gulf countries increased by 4.4 million barrels per day in September to 13.9 million, reaching more than 75% of pre-war volumes. Meanwhile, oil shipments through the Strait of Hormuz recovered to approximately 10.9 million barrels per day, although petroleum product exports remain significantly below normal levels. Therefore, further price declines could be limited if diplomatic expectations fail to translate into an actual restoration of safe shipping.

Support at $84.50 faces renewed bearish pressure

The break below support at $87.50 pushed WTI prices down toward support around $84.50. The rebound from this support is limited by resistance near $86.50, below which the risk of a break below support and a decline toward $84–83 remains high. A break above resistance would lead to a rise toward $87–88, although selling pressure could intensify before these levels are reached.

Given the tense situation in the Middle East, bears in the oil market, as I stated in WTI retests $87.50 support as diplomatic hopes fuel another selloff, should continue to exercise extreme caution.

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