Hopes of an end to Iran war fuelled by midterm elections send WTI tumbling below $86.50

Selling pressure drives WTI down towards $86.40 during early European trade on Thursday.
Control of both the House of Representatives and the Senate passed to the Democrats.
EIA reported a decline of 865,000 barrels in crude oil stocks for the week ended 30 October.

Selling pressure has brought West Texas Intermediate (WTI), the US crude oil benchmark, to around $86.40 in Thursday’s early European session. The decline follows the loss of congressional control by President Donald Trump's Republican Party in the midterm elections.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Prospects of political gridlock in the US have increased, while expectations of renewed military strikes against Iran by Trump have diminished following Tuesday’s election result. The Democrats secured majorities in both the US Senate and House of Representatives, displacing the Republicans.

WTI prices are also facing some selling pressure from Trump’s remarks. After saying on Tuesday that Washington had no immediate plans to attack Iran, he acknowledged on Wednesday that the Iran war had contributed to his party’s sweeping midterm election defeat.

Dennis Kissler, senior vice president of trading at US financial services firm BOK Financial, said: "The Democratic control of Congress could also tighten US military spending in the Middle East and further heighten the possibility of a peace deal sooner rather than later,"

Last week’s drawdown in US crude inventories fell short of market expectations. The Energy Information Administration (EIA) reported a reduction of 865,000 barrels for the week ending 30 October, against the market consensus of a 900,000-barrel decline. Stocks had fallen by 1.892 million barrels in the preceding week.

How is Middle East diplomacy shaping the Brent outlook?

US midterm election results have “further” strengthened TD Securities’ view that “the expectation for a deal as opposed to escalation in the Middle East” remains “the main drag on crude oil prices,” with a persistent “diplomacy headline drag remains” weighing on crude. Looking beyond the “potential for a near-term overshoot,” the bank expects crude to “settl[e] into a higher-for-longer regime, with fair value for Brent crude oil remaining in the $90-100/bbl range,” while also identifying “potential for upside via risk premium so long as the Middle East and Russia-Ukraine conflicts remain unresolved.”

Technical Analysis: Can WTI Hold Above the 100-day SMA?

Despite holding marginally above its 100-day Simple Moving Average (SMA) on the daily chart, WTI US Oil retains a bearish structure. Prices remain substantially below the 20-day Bollinger middle band, suggesting that medium-term overhead resistance is limiting the market. With the Relative Strength Index (14) hovering near 35, momentum remains weak, suggesting that sellers retain control even as prices approach trend support.

Immediate trend support lies at the 100-day SMA of $86.10. A sustained move below this level would likely pave the way for further declines, consistent with the subdued RSI reading. Any recovery would first encounter resistance at the lower Bollinger band around $87.60; an extended rebound would face stronger hurdles at the middle band near $96.60 and the upper band around $105.60.

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

WTI Oil: Common Questions

What does WTI Oil mean?

Traded internationally, WTI Oil is a variety of crude oil whose initials stand for West Texas Intermediate. Alongside Brent and Dubai Crude, it is one of the three major crude varieties. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality oil is regarded as easy to refine. Produced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil-market benchmark, and its price is regularly cited in media reports.

What determines WTI Oil prices?

Supply and demand determine WTI Oil prices, as they do for other assets. Stronger global growth can lift demand, whereas weaker growth can have the reverse effect. Supply disruptions arising from political instability, wars or sanctions can also affect prices. Another important influence is the policy decisions of OPEC, a grouping of major oil-producing countries. Since oil is largely traded in US Dollars, movements in the currency’s value matter as well: a weaker US Dollar can make WTI Crude Oil more affordable, while a stronger one can have the opposite effect.

Why do inventory figures affect WTI Oil prices?

WTI Oil prices respond to the weekly oil stock reports issued by the American Petroleum Institute (API) and the Energy Information Agency (EIA), as inventory movements signal changes in supply and demand. Falling stocks may point to stronger demand and lift prices, while rising inventories may indicate greater supply and weigh on prices. The API releases its report each Tuesday, followed by the EIA the next day. The two sets of figures generally align, coming within 1% of each other 75% of the time. As the EIA is a government agency, its data is viewed as more reliable.

How do OPEC decisions affect WTI Oil prices?

At meetings held twice a year, the 12 oil-producing nations that make up OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently influence WTI Oil prices: lower quotas can constrain supply and raise prices, while higher production has the reverse effect. The wider OPEC+ grouping brings in ten additional non-OPEC members, with Russia the most notable among them.