FX.co ★ CL/Crude Oil

West Texas Intermediate (WTI)—the benchmark for U.S. crude—faced downward pressure for the second consecutive day, settling below the $87 mark during Asian trading hours. This weakness kept prices near the one-month low recorded in the previous session. A primary driver of this decline was the political shift in Washington following the U.S. midterm elections, in which the Democratic Party secured control of both the House of Representatives and the Senate. Senate Majority Leader Chuck Schumer indicated that the Democrats intend to leverage their authority over federal appropriations to push for a diplomatic resolution to the ongoing conflict with Iran. This shift in legislative power prompted energy traders to significantly reduce the geopolitical risk premium that had previously inflated crude oil prices. Expectations for de-escalation were further bolstered by U.S. President Donald Trump’s confirmation that the United States has no current plans for a military strike against Iran, signaling a potential pivot toward a diplomatic solution. Despite the push for a political resolution, constrained physical supplies from the Middle East have prevented a total collapse in energy prices. The Strait of Hormuz remains a focal point for the markets, given the persistent maritime risks that directly threaten the global transport of oil. Iranian authorities have publicly declared the conditions proposed by Washington for the reopening of this strategic waterway to be "unacceptable," underscoring the continued political tension between the two sides. Reports of an oil tanker being struck by a mine off the coast of Oman have heightened security risks, once again underscoring the vulnerability of physical oil supplies from the Arabian Gulf. Meanwhile, broad-based selling pressure on the US dollar has provided some support for dollar-denominated commodities. Consequently, market participants are advised to exercise caution before concluding that a macroeconomic peak has been reached—especially given that oil prices touched a multi-month high (reaching approximately $104 per barrel, the highest level since May) last Friday, before quickly retreating. From a technical perspective, as long as West Texas Intermediate (WTI) crude prices remain above the 100-day simple moving average ($86.11) and the 50% Fibonacci retracement level of the recent rally ($85.59), the medium-term trend structure will remain robust. This zone of converging support highlights strong buying interest in the market following the pullback from multi-month highs. However, should prices fall decisively below this support range—between $85.59 and $86.11—the current bullish pattern would lose momentum, potentially leading to further declines. In such a scenario, downside targets would lie at $81.27 (the 61.8% Fibonacci retracement) and $75.12 (the 78.6% Fibonacci retracement), while the $67.29 level (a previous low) serves as a long-term structural support. On the upside, initial resistance lies at $89.91 (the 38.2% Fibonacci retracement level). If the price manages to rise decisively above this level, it could retest the $95.25 mark (the 23.6% Fibonacci retracement level) and subsequently challenge the key, long-standing resistance level at $103.89.