What to Know
- Crude retreated on Thursday after a renewed US push for talks with Tehran revived hopes that diplomacy could return to the market narrative.
- December Brent fell 1.1% to $114.10, while WTI dropped 1.3% to $101.45 early Thursday, giving back part of the prior session’s gains.
- US Vice President JD Vance sent a letter to Iranian Security Council chief Mohsen Rezaei seeking to revive peace negotiations.
- Oil losses were limited as a senior Iranian official dismissed a new draft deal from Qatari mediators as unacceptable and Houthi attacks continued.
- US crude inventories fell 1.9mn barrels to 410.6mn in the week to October 23, versus expectations for a small build.
- US crude stocks are now about 4% below the five-year average, while Gulf Coast inventories fell to their lowest level since December 2024.
- Cushing inventories dropped 624,000 barrels, and US crude exports jumped 1.4mn bpd to 4.85mn bpd.
- Distillate inventories fell 1.5mn barrels to about 10% below the five-year average, while gasoline inventories rose 3.9mn barrels as implied demand slipped.
- November natural gas futures expired about 3% higher at $2.776, but the 12-month strip fell to a 26-month low of $2.84.
- Technical traders are watching WTI support at $99.61, Brent support at $109.17, and natural gas resistance at $3.12.
Crude Pulls Back as Diplomacy Re-enters the Oil Narrative
Oil prices eased on Thursday as traders balanced renewed diplomatic signals around Iran against persistent security risks in the Gulf. The pullback followed a rally in the previous session, but it did not develop into a deeper selloff because the physical market still showed signs of tightening, especially in the United States.
December Brent, which expires on Friday, fell 1.1% to $114.10, while WTI declined 1.3% to $101.45 early Thursday. The move reflected a market that is no longer pricing only escalation risk. A letter from US Vice President JD Vance to Iranian Security Council chief Mohsen Rezaei revived hopes that peace negotiations could resume, giving sellers a reason to trim exposure after recent gains.
For crude traders, the issue is not simply whether talks are mentioned, but whether they can reduce the risk premium that has built into prices. When diplomacy appears possible, even without a completed agreement, the market can discount some of the immediate fear tied to supply disruptions. That dynamic was visible in the retreat across both Brent and WTI.
Why the Oil Pullback Remains Limited
The decline in crude remained contained because the diplomatic track is still uncertain. A senior Iranian official dismissed a new draft deal from Qatari mediators as unacceptable, leaving the market with no clear breakthrough. At the same time, Houthi attacks continued, including a claimed strike on Ras Tanura, Saudi Arabia’s largest refinery.
That combination keeps crude in a two-sided environment. On one side, renewed talks can cool speculative buying and reduce fear-driven momentum. On the other side, ongoing attacks and the absence of an accepted diplomatic framework prevent traders from removing geopolitical risk altogether. In practical terms, the market is being offered the possibility of diplomacy, but has not yet received confirmation that tensions are easing.
This helps explain why oil gave back part of its gains rather than collapsing. Energy traders are still dealing with a market where headlines can quickly shift the balance between supply-risk buying and diplomacy-driven profit taking. Until talks are formally accepted and security conditions improve, the risk premium is likely to remain a major part of crude pricing.
US Inventory Data Points to a Tighter Domestic Market
US inventory data added support to crude by showing another tightening signal. Crude inventories fell 1.9mn barrels to 410.6mn in the week to October 23, compared with expectations for a small build. Stocks are now about 4% below the five-year average, a notable signal for this time of year because it suggests the market has less cushion than usual.
The details were also supportive for WTI. Gulf Coast inventories fell to their lowest level since December 2024, while Cushing stocks, the delivery point for WTI futures, dropped 624,000 barrels. Lower inventories at Cushing can matter for futures pricing because the hub is central to physical delivery and benchmark valuation.
Exports strengthened sharply as well, jumping 1.4mn bpd to 4.85mn bpd. Strong exports can draw barrels out of domestic storage and tighten the local balance, especially when combined with lower commercial inventories. For WTI, that can provide a counterweight when geopolitical headlines or dollar moves pressure crude prices.
Refined products were mixed. Distillates, which include diesel and heating oil, fell 1.5mn barrels to about 10% below the five-year average. That reinforces concerns about middle-distillate tightness. Gasoline was the exception, rising 3.9mn barrels as implied demand slipped, which softened the broader inventory picture but did not erase the bullish tone in crude and distillates.
WTI Technical Outlook: $99.61 Holds the Line
WTI was trading near $101.70 on the 2-hour chart, down about 1.4% on the day. The key technical feature is the repeated failure just below $103.94. Oil has now been rejected near that area for the second time in a week, making it a level technical traders are treating as increasingly important resistance.
Despite the rejection, WTI remains above the $99.61 zone. That area previously acted as a ceiling and now functions as a potential floor. When former resistance becomes support, chart watchers often view it as a sign that buyers still have some control, provided price does not close back below the level.
Support is seen at $99.61, followed by $95.41. Resistance stands at $103.94, followed by $107.38. Momentum has cooled, with RSI near 58 and below its signal line. That does not necessarily signal a trend reversal, but it does show that the latest rebound has lost some force.
Market participants may keep a slight bullish lean while WTI holds above $99.61. A close above $103.94 would shift attention toward $107.38, while a drop below $99.61 would weaken the setup and point toward $95.41. In this environment, the technical picture is closely tied to headlines: diplomacy can cap rallies, while inventory tightness and security risks can limit downside.
Brent Technical Outlook: $112.20 Remains the Barrier
January Brent futures were trading near $110.19 on the 4-hour chart, down about 1.3% on the day. Brent tested $112.20 for the third time and was pushed back again, showing that sellers remain active around that level. Even so, Brent continues to trade inside a rising channel that has guided prices higher since late September.
The market has moved sideways between $109.17 and $112.20 for nearly a week. This narrow range shows hesitation rather than a clear reversal. Traders are waiting to see whether geopolitical risk, supply tightness, or diplomacy becomes the dominant driver.
Initial Brent support is at $109.17, followed by $106.02. On the upside, $112.20 is the first resistance, followed by $114.37. RSI is near 53 and below its signal line, suggesting that momentum is cooling but not yet decisively bearish.
A neutral bias is reasonable while Brent remains between $109.17 and $112.20. A close above $112.20 would open the path toward $114.37, while a break below $109.17 would point to $106.02. For now, Brent appears trapped between geopolitical support and diplomacy-led selling pressure.
Natural Gas: Near-Term Strength Meets a Weak Curve
Natural gas delivered a more complicated signal. The November futures contract expired about 3% higher at $2.776 on Wednesday, supported by stronger near-term demand forecasts and rising LNG flows. That strength, however, was not mirrored across the forward curve.
The 12-month strip, which represents the average price of the next twelve monthly contracts, fell to a 26-month low of $2.84. This is a sign that the broader market still sees ample supply beyond the immediate period. In other words, short-term demand and LNG activity helped the expiring contract, but the market is not yet convinced that supply conditions will tighten meaningfully over a longer horizon.
Weather also remains a limiting factor. Meteorologists expect milder-than-normal conditions through November 12, which can reduce heating demand and make it harder for natural gas to sustain a strong rally. In gas markets, weather expectations can change quickly, but current forecasts are not providing strong support for a lasting upside move.
Natural Gas Technical Outlook: $3.12 Caps the Rebound
December natural gas was trading near $3.03/MMBtu on the daily chart, little changed on the day. After bouncing from near $2.80 on Monday, prices stalled just above $3.00. The slower moving average sits close to current levels, reinforcing the idea that the market is at a technical decision point.
The first resistance is $3.12, followed by $3.22. Both levels are Fibonacci markers that track how much of the prior decline has been recovered. Support sits at $3.00, followed by $2.80. As long as natural gas struggles below $3.12, traders may continue to view rebounds as corrective rather than trend-changing.
RSI is flat near 39, showing that the rebound has lost pace. Some technical traders may keep a slight bearish lean while prices remain below $3.12. A close above that level would open $3.22, while a drop below $3.00 would point back toward $2.80.
Market Outlook: Headlines and Inventory Tightness Drive the Next Move
The oil market is being pulled between two major forces. Diplomacy around Iran is pressuring the geopolitical premium, while US inventory data is signaling tighter supply conditions. That tension explains why crude has slipped but not broken down.
For WTI, $99.61 is the central level to watch. Holding above it keeps the recovery structure intact, while a break would indicate that diplomacy-led selling or fading momentum has gained the upper hand. For Brent, the immediate battle is between $109.17 and $112.20. A breakout on either side would likely define the next short-term direction.
Natural gas remains a separate story. Near-term demand and LNG flows supported the expiring November contract, but the weak 12-month strip and mild weather expectations continue to weigh on the broader outlook. Until December gas clears $3.12, the market may struggle to convince traders that a more durable rebound is underway.
Frequently Asked Questions (FAQs)
Why did oil prices fall on Thursday?
Oil prices fell as renewed US efforts to revive talks with Tehran reduced some of the geopolitical risk premium. Brent and WTI both gave back part of their prior gains as traders weighed diplomacy against ongoing Gulf security risks.
Why was the crude pullback limited?
The decline was limited because no diplomatic breakthrough has been accepted, while attacks in the region continued. US inventory data also showed a tighter domestic crude market, which helped support prices.
What happened to US crude inventories?
US crude inventories fell 1.9mn barrels to 410.6mn in the week to October 23. Stocks are about 4% below the five-year average, reinforcing the view that the US market remains relatively tight.
Why is Cushing important for WTI?
Cushing is the delivery point for WTI futures, making its inventory levels important for benchmark pricing. Cushing stocks fell 624,000 barrels, which can support WTI when supply at the hub tightens.
What are the key WTI levels to watch?
WTI support is at $99.61, followed by $95.41. Resistance is at $103.94, followed by $107.38. A hold above $99.61 keeps the near-term bullish structure alive, while a break below it would weaken the outlook.
What are the key Brent levels to watch?
Brent support is at $109.17, followed by $106.02. Resistance is at $112.20, followed by $114.37. The market has been trading between $109.17 and $112.20, making a close outside that range important.
Why is natural gas struggling despite a bounce?
Natural gas bounced from near $2.80, but the broader curve remains weak. The 12-month strip fell to a 26-month low of $2.84, signaling that traders still see ample supply beyond the near term.
What level matters most for natural gas now?
The $3.12 level is the key resistance for December natural gas. A close above it would open $3.22, while failure to hold $3.00 would point back toward $2.80.
How does weather affect natural gas prices?
Weather influences heating and cooling demand. Milder-than-normal conditions through November 12 may limit heating demand, making it harder for natural gas to sustain a stronger rally.