WTI rebounds to around $95.50 on hopes of Iran peace talks

• At around $95.30, WTI regains ground in early Asian trading on Tuesday.
• Oil prices came under pressure after Tehran said contacts with the US aimed at ending their eight-month war were ongoing.
• The API crude oil stockpiles report and efforts to secure a diplomatic resolution to the US-Iran conflict will remain in traders’ focus.

After touching $94.30 in the previous session, its lowest level since 16 October, West Texas Intermediate (WTI) has recovered to around $95.30 in early Asian trading on Tuesday. The US crude oil benchmark is recouping part of those losses.

Discussions aimed at ending the eight-month conflict between the US and Iran remain under way, Iran said, according to a Reuters report on Monday. Several days of talks involving Iranian officials and Qatari mediators had produced revised proposals, but no significant 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 previously stated that he would not attack Iran before the US midterms.

With much of the market’s recent advance reflecting risk premiums linked to a potential escalation, hopes of a breakthrough to end the Iran war could significantly affect crude oil prices, according to Ryan McKay, director of commodity strategy at TD Securities.

McKay added: “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,”

Later on Tuesday, the American Petroleum Institute (API) is due to publish its crude oil stockpiles report, which traders are awaiting. An inventory draw larger than forecast would point to stronger demand and could support WTI. Conversely, a greater-than-expected build would suggest softer demand or excess supply, potentially weighing on the benchmark.

Crude risk premium eases on diplomacy headlines, but a full unwinding appears unlikely

Reports that President Trump is prepared to allow more time for diplomacy have “seen a portion of the geopolitical risk premium priced out of crude oil and petroleum products.” TD Securities says recent “headlines and hopes of diplomacy have eroded some risk premium in crude oil markets,” noting that, 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.” Nevertheless, 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: WTI holds above the 100-day SMA, retaining a constructive bias

Holding comfortably above its 100-day simple moving average (SMA), WTI US Oil retains an apparently bullish near-term bias on the daily chart, with the price trading towards the upper half of the recent Bollinger envelope. Yet the benchmark is still just below the Bollinger middle band, indicating that the latest advance is taking a pause before an attempt to reach 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 level, followed by a more substantial barrier at the upper band near $104.95. Below the market, demand is concentrated around the current pivot zone. Further support lies at the Bollinger lower band at $88.70 and the 100-day SMA near $85.85; a deeper pullback towards these levels would be expected to draw buyers and maintain the broader uptrend.

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