Can WTI Recover After Falling Below $85.00 Amid Ukraine Peace Talk Hopes and Oversupply Concerns?

• WTI loses steam, trading near $84.75 during early European trade on Thursday.
• Two days of peace negotiations in Abu Dhabi yielded an agreement between Russia and Ukraine on a major prisoner exchange.
• API reported a 9 million-barrel rise in crude oil stocks for the week ended November 5.

Hopes of progress in peace negotiations concerning the Middle East and Russia-Ukraine, alongside rising US inventories, are weighing on West Texas Intermediate (WTI). The US crude oil benchmark is changing hands near $84.75 in Thursday’s early European session.

A major prisoner exchange was agreed by Russian and Ukrainian negotiators after two days of peace negotiations in Abu Dhabi ended on Wednesday, Reuters reported. Despite the agreement, substantial differences remain on core issues, especially territory, according to US mediators. Ukrainian President Volodymyr Zelensky voiced hope that concrete progress towards resolving the war could be achieved this year.

Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, a unit of Nissan Securities, said: "Markets are falling on expectations that behind-the-scenes efforts are underway to secure a ceasefire between Russia and Ukraine and that it is unlikely the Iran war will escalate ahead of the US-China summit next week,"

Kikukawa also said: "However, given the uncertainty surrounding the Strait of Hormuz, the markets are unlikely to suffer a significant collapse,"

Concerns over excess supply intensified after US crude oil stocks registered a sizeable increase last week. The Energy Information Administration (EIA) reported a build of 9 million barrels for the week ending November 5, following a draw of 5.267 barrels a week earlier. Markets had expected inventories to decline by 1 million barrels.

Can oil volatility ease while US-Iran diplomacy remains uncertain?

Oil markets, according to Commerzbank analysts, "remain volatile as investors assess whether the Democrats' control of Congress could accelerate diplomatic efforts to end the US-Iran conflict." On the diplomatic outlook, they say that "reports that Iran is reviewing proposals concerning its nuclear programme offered some encouragement, although no comprehensive agreement has been announced and risks to Gulf shipping remain." In this environment, Commerzbank points out that "Brent crude oil prices rose 5% to USD99.33."

Technical Analysis: Can WTI Shake Off Its Bearish Bias Below the 100-day SMA?

A bearish near-term outlook remains in place on the daily chart as WTI US Oil continues its correction beneath its key moving average structure and the middle line of the Bollinger Bands. The 100-day simple moving average (SMA) is restricting gains, whereas the lower Bollinger Band provides an initial cushion against declines. At around 34, the Relative Strength Index (14) remains in oversold territory, suggesting that downward momentum is fading without yet pointing to a bullish reversal.

The first hurdle for any recovery is the 100-day SMA at $86.80, followed by the middle Bollinger Band near $94.95. A stronger rebound would bring the upper band at $107.45 into view as a more distant resistance level. Initial support, meanwhile, lies near $82.45 at the lower Bollinger Band. A decisive move below it would strengthen the bearish outlook and leave scope for further declines over the coming sessions.

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