Below $85.50: WTI retreats as hopes for US-Iran diplomacy build

• 4.95% is WTI’s daily decline in early Asian trading on Tuesday. Selling pressure brings the price close to $85.30.
• Fresh strikes on Iran are highly unlikely to be ordered, Trump said.
• Crude prices retreat as hopes build for a breakthrough in talks to end the US war in Iran.

$85.30 is the approximate price of West Texas Intermediate (WTI) in Tuesday’s early Asian session. The US crude benchmark has dropped to its lowest level since August as diplomatic efforts to end the Middle East war fuel optimism, despite continuing attacks across the region. Attention now turns to the American Petroleum Institute (API) weekly crude oil inventory report, due later on Tuesday.

Over the weekend, US President Donald Trump described the prospect of ordering extensive strikes on Iran as “highly unlikely”. He nevertheless made this conditional on Iran signing a “very strong agreement.”

Talks with Trump and Vice President JD Vance in Washington, DC, focused on advancing US-Iran negotiations, Qatari Prime Minister and Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani said on Monday.

Under a new Qatar-Pakistan proposal, Washington would permit Iran to enrich uranium domestically up to 3.67%, a limit Tehran has agreed to, according to an Al Arabiya source. The proposal forms part of efforts to restart bilateral negotiations. Alongside it, the US has offered to release Iranian assets worth between $6 billion and $9 billion if the two sides reach an agreement.

In a note, TACenergy analysts said: "This seems to have encouraged sellers on the prospects for peace even while the actual fighting is not slowing down,"

Meanwhile, the Houthis claimed an attack on Sunday targeting Saudi oil giant Aramco's corporate office in Riyadh’s financial district. According to the Saudi energy ministry, debris from the attempted attack shattered windows on several floors.

Oil volatility continues amid uncertain US-Iran diplomacy

Commerzbank analysts describe oil markets as follows: "remain volatile as investors assess whether the Democrats' control of Congress could accelerate diplomatic efforts to end the US-Iran conflict." Sentiment remains fragile, with the analysts also noting 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,"

100-day SMA: WTI Technical Analysis Signals Bearish Bias Below Key Average

Trading below both the 100-day simple moving average (SMA) and the lower Bollinger Band leaves WTI US Oil with a bearish near-term bias on the daily chart. This positioning points to a breach of the recent volatility floor. Well above the price, the Bollinger Bands 20-period SMA and upper band show the scale of the latest retreat. The Relative Strength Index (14), at 34.73, is approaching oversold territory. Rather than confirming a reversal, it suggests that downward pressure persists.

A narrow resistance zone sits just above the market: the 100-day SMA at $86.40 provides the first hurdle, followed by the lower Bollinger Band around $86.65. Higher up, the Bollinger mid-line at $96.35 represents a more substantial structural barrier. The upper band near $106.05 then sets a broader ceiling for a stronger corrective rebound. The supplied indicators offer no clear support below $85.30, so traders are likely to turn to previous price lows and psychological levels to identify potential demand. As long as WTI stays beneath these overhead technical barriers, the current setup suggests that rallies remain vulnerable to selling.

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