WTI slumps to near $87.50 as US inventories surge and attention turns to geopolitical risks

• WTI retreats towards $87.50 during early Asian trading on Friday.
• A deal with Iran is no longer needed by the US, Trump says.
• Global oil flows face threats as attacks on Saudi energy infrastructure intensify.

Rising US crude oil inventories are weighing on West Texas Intermediate (WTI), with the US crude benchmark trading at around $87.50 in Friday’s early Asian session as momentum fades.

A 9 million-barrel increase in US crude stockpiles last week heightened concerns over excess supply. Energy Information Administration (EIA) figures for the week ending 5 November showed the build followed a decline of 5.267 barrels the previous week. Markets had expected inventories to fall by 1 million barrels.

According to CNBC, US President Donald Trump said on Thursday that Washington should stop pursuing an agreement with Iran. In a post on Truth Social, Trump wrote: “We don’t need a deal with Iran. Those days have long since passed,”

Just over a week before those remarks, Republicans had sustained heavy losses in the US midterm election. Vance and other Republicans have attributed the setbacks to the Iran war, launched by the US and Israel in late February. The comments from Trump fuelled concerns that an end to the US-Iran conflict remained out of sight.

Escalating attacks on Saudi energy infrastructure, alongside disruption to shipping through the Strait of Hormuz, put global oil flows at risk.

Responsibility for attacks on a pumping station along the Saudi East-West oil pipeline, an oil facility in the Saudi Red Sea city of Yanbu and an Aramco building in the capital, Riyadh, was claimed by Yemen’s Iran-aligned Houthis.

Separately, the Iranian military said on Thursday that explosions had struck four oil tankers in the Strait of Hormuz after the vessels disregarded warnings.

Brent draws support from escalating Strait of Hormuz tensions

According to analysts at Commerzbank Research, "tensions in the Strait of Hormuz escalated overnight," while Iran’s IRGC Navy claimed that "two additional oil tankers struck mines while attempting to transit the waterway, with both vessels reportedly on fire." Describing the market response, Commerzbank notes that "Brent crude rose 1.2% to USD92.63, as the latest Hormuz mine incidents provided a floor to prices despite the broader November slide of approximately 17%."

Technical Analysis: WTI remains in near-term consolidation

Holding just above its 100-day simple moving average (SMA), WTI US Oil shows a neutral to range-bound near-term bias on the daily chart. Prices remain substantially below the Bollinger Bands’ 20-day SMA centre line, which limits the upside. Broader consolidation is supported by the lower Bollinger band at $82.30. Meanwhile, a Relative Strength Index (RSI) reading of 40.6, below the 50 threshold, suggests modest bearish momentum rather than a decisive break in the trend.

The Bollinger 20-day SMA centre band near $94.60 presents the first resistance level, followed by a more substantial obstacle at the upper Bollinger band of $106.85. Support initially lies at the 100-day SMA of $87.00. Below that, the lower Bollinger band near $82.30 provides a more significant structural floor, where buyers would likely seek to protect the broader uptrend against a deeper correction.

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