WTI rebounds to nearly $95.50 amid hopes of Iran peace talks

• WTI recovers towards $95.30 as early Asian trading gets under way on Tuesday.
• Oil prices came under pressure after Tehran disclosed that Iran and the US remained in contact over ending their eight-month war.
• Diplomatic efforts to resolve the US-Iran conflict and the API crude oil stockpiles report will remain in focus for traders.

A partial recovery has taken West Texas Intermediate (WTI), the US crude oil benchmark, to around $95.30 in Tuesday’s early Asian trade. The rebound follows a slide to $94.30 in the previous session, its lowest level since 16 October.

Talks aimed at ending the eight-month US-Iran conflict remain under way, Iran said, according to a Reuters report on Monday. Several days of discussions involving Iranian officials and Qatari mediators had produced revised proposals, but no major breakthrough.

Iranian Foreign Minister Abbas Araqchi said: "Consultations through mediators are very intensive. We have presented our conditions and proposals and everything depends on the political rationality of Washington,"

While Iran’s President Masoud Pezeshkian said Tehran wants to address problems through dialogue, US President Donald Trump had earlier stated that he would not attack Iran before the US midterms.

The prospect of a breakthrough that ends the Iran war could substantially affect crude prices, according to Ryan McKay, director of commodity strategy at TD Securities. He noted that risk premiums linked to a possible escalation accounted for much of the market’s recent gains.

McKay said: “With that said, so long as there is no concrete conclusion to the war, and tanker and Houthi attacks remain prevalent, we do not anticipate a complete erosion of the risk premium via diplomacy headlines alone,”

The American Petroleum Institute (API) crude oil stockpiles report, due later on Tuesday, is the next release traders are awaiting. An inventory draw exceeding expectations would point to stronger demand and could support WTI prices. Conversely, a larger-than-forecast build would suggest weaker demand or surplus supply, potentially weighing on WTI.

Can diplomacy headlines remove crude’s entire risk premium?

TD Securities says recent “headlines and hopes of diplomacy have eroded some risk premium in crude oil markets,” pointing to reports that President Trump is prepared to allow more time for diplomacy. Those reports have “seen a portion of the geopolitical risk premium priced out of crude oil and petroleum products.” With market “flows elevated, and a large portion of recent upside attributed to a risk premium, these headlines will have an increasingly large impact on the market.” However, the bank warns that “headlines alone are unlikely to shed the whole risk premium” and reiterates that “so long as there is no concrete conclusion to the war, and tanker and Houthi attacks remain prevalent, we do not anticipate a complete erosion of the risk premium via diplomacy headlines alone.”

Technical Analysis: Can WTI sustain its positive bias above the 100-day SMA?

WTI US Oil retains an apparently bullish near-term bias on the daily chart, with prices comfortably above the 100-day simple moving average (SMA) and nearer the upper half of the recent Bollinger envelope. Nevertheless, prices are still just below the Bollinger middle band, indicating a pause in the latest rise before a move towards higher levels. Directional momentum remains broadly neutral, with the Relative Strength Index (RSI) around 48.

The Bollinger middle band at $96.80 provides the first resistance, followed by a more substantial hurdle at the upper band near $104.95. Immediate buying interest on the downside is concentrated around the current pivot zone. Below that lie support at the Bollinger lower band of $88.70 and the 100-day SMA near $85.85, where buyers would be expected to step in during a deeper pullback, keeping the broader uptrend intact.

(The technical analysis of this story was written with the help of an AI tool. Know more.)