What to Know
- Crude extended its slide on Tuesday after President Trump signaled restraint on Iran, reducing the immediate risk premium attached to Middle East supply disruptions.
- Brent settled at $92.57 on Monday, its lowest level since August 31, after a 16% fall last week, its steepest weekly drop since the start of the Covid-19 pandemic.
- The US naval blockade in the Strait of Hormuz remains in place for now, keeping geopolitical risk alive even as diplomacy gains attention.
- OPEC output rose 1.38mn barrels per day in October to 22.87mn bpd, while JPMorgan estimated the global surplus at about 1.4mn bpd that month.
- WTI is trading near $85.35 on the 4-hour chart after breaking below a rising channel and is testing support at $85.03.
- January Brent futures are trading near $91.36 on the 4-hour chart after breaking below a rising trendline, with $84.28 now in focus as support.
- December natural gas futures rose 5.4% to $3.16/MMBtu on Monday, a three-week high, helped by colder forecasts and lower output.
- Lower 48 natural gas output slipped to 112.1bn cubic feet per day so far in November from 113.4bn in October.
- Feedgas to the nine big US LNG plants averaged a record 19.3 bcfd so far in November, above October’s record of 18.4 bcfd.
- Natural gas is trading near $3.24/MMBtu on the 4-hour chart, above its $3.19 pivot, with $3.34 and $3.45 as resistance levels watched by technical traders.
Crude Weakens as Traders Reprice Iran Risk
Oil markets remained under pressure as traders reassessed the likelihood of an immediate escalation around Iran and the Strait of Hormuz. President Trump said on Monday that he would hold off on new military strikes against Iran for now after appeals from regional countries, including Qatar’s prime minister during White House talks. The shift in tone helped deepen the selloff in crude, with market participants trimming the war premium that had previously supported prices.
Brent settled at $92.57 on Monday, its lowest since August 31, after a 16% drop last week. That weekly fall was the steepest since the start of the Covid-19 pandemic, underscoring how quickly the market has moved from pricing acute supply fear to focusing again on flows, inventories, and spare supply. The move lower also reflected the fact that attacks on shipping in or near the strait have not escalated enough to force traders to rebuild a stronger disruption premium.
The restraint does not remove geopolitical risk entirely. The US naval blockade in the Strait of Hormuz remains in place for now, and talks remain fragile. Secretary of State Marco Rubio described some of Iran’s demands as outrageous, ridiculous, and not realistic. Iran’s foreign ministry spokesman Esmaeil Baghaei said on November 2 that Hormuz could reopen within two days if the US accepted Tehran’s conditions, which include an end to the war on all fronts. For energy traders, the result is a market that is no longer chasing panic barrels but is still exposed to sudden headline risk.
Physical Oil Supply Looks Less Tight
Beyond the political tone, the physical supply picture has also softened. More oil is finding its way out of the Gulf, reducing fears that the blockade would sharply restrict available barrels. Iraq reached understandings with Washington to export oil through Hormuz along a shipping lane near Oman, Foreign Minister Fuad Hussein told Al Jazeera on November 8. That development matters because it suggests some regional flows can continue despite the broader strategic pressure around the strait.
Supply data has reinforced the weaker price backdrop. OPEC output rose 1.38mn barrels per day in October to 22.87mn bpd, while JPMorgan estimated the global surplus at about 1.4mn bpd in that month. A surplus does not mean every buyer has easy access to every grade of crude, but it does mean the balance is less supportive for prices than it would be in a deficit. When supply rises while risk appetite fades, the pressure on futures can intensify quickly.
The physical market is also showing signs of reduced urgency. Morgan Stanley said Dated Brent, the benchmark price for physical North Sea cargoes, has slipped to a discount to nearby Brent futures. That kind of structure can signal that buyers do not need barrels immediately and are less willing to pay up for prompt cargoes. In practical terms, the market is behaving less like one bracing for a near-term shortage and more like one adjusting to looser availability.
WTI Technical Picture Points to a Key Support Test
WTI is trading near $85.35 on the 4-hour chart after breaking below the rising channel that had guided prices higher since July. The breakdown is important for technical traders because channels often define momentum, and a move beneath the lower boundary can suggest that buyers have lost control of the trend. A rebound toward $92 failed, leaving prices vulnerable near the next important support zone.
The key support level for WTI is $85.03, followed by $77.22 if selling pressure extends. Resistance is located at $93.33, followed by the broken channel floor near $95. Both moving averages are falling above price, which adds to the bearish technical structure because it shows that average prices over recent periods remain higher than the current market and are now acting as potential overhead resistance.
RSI is near 26, placing WTI in oversold territory. That means prices have fallen quickly and a short-term bounce is possible. However, oversold readings do not automatically mean a durable bottom has formed. Some chart watchers maintain a bearish bias while WTI remains below $93.33. A close below $85.03 would put $77.22 into focus as the next downside level.
Brent Breaks Trend Support as $84.28 Comes Into View
January Brent futures are trading near $91.36 on the 4-hour chart after breaking below a rising trendline connecting higher lows since August. The failed rebound at $100.70, near the slower moving average, reinforced the loss of upside momentum. Since then, prices have slipped below $93.28, turning that area into an important resistance level for traders watching whether Brent can regain lost ground.
Support for Brent is now seen at $84.28, followed by $76.90. Resistance is $93.28, which has become a ceiling after the break, followed by $100.70. The structure keeps the focus on whether sellers can press the market toward the next support zone or whether oversold conditions trigger a relief move back toward broken support.
RSI is near 25, even deeper in oversold territory than WTI. That increases the chance of a pause or countertrend bounce, but the broader technical bias remains cautious while Brent stays below $93.28. A close below $84.28 would open the way toward $76.90, according to levels watched by technical traders.
Natural Gas Climbs on Colder Forecasts and Lower Output
Natural gas moved in the opposite direction from crude. December natural gas futures rose 5.4% to $3.16/MMBtu on Monday, a three-week high, as colder forecasts and lower output encouraged fresh buying. Weather remains a major driver for gas because colder conditions can lift heating demand and quickly change expectations for storage withdrawals.
LSEG said Lower 48 output slipped to 112.1bn cubic feet per day so far in November from 113.4bn in October. It also expects demand, including exports, to rise from 114.7 bcfd this week to 120 bcfd next week. That combination of lower output and rising expected demand has helped support prices, even though storage remains above normal.
Exports are adding another source of demand. Feedgas to the nine big US LNG plants averaged a record 19.3 bcfd so far in November, above October’s record of 18.4 bcfd. Feedgas is the gas sent to liquefied natural gas plants, where it is cooled into liquid form for shipment abroad. Strong LNG flows can tighten the domestic balance by pulling more supply toward export facilities.
Analysts estimate storage was about 2.1% above normal in the week ended November 6, up from 1.4% a week earlier. The EIA’s next storage report is due on November 13, and the key question is whether colder weather begins to shrink that surplus. If the surplus narrows, bullish traders may gain confidence. If it persists or widens, the rally could face more resistance.
Natural Gas Technical Setup Stays Constructive Above $3.19
Natural gas is trading near $3.24/MMBtu on the 4-hour chart, climbing inside a rising channel that has guided prices since late October. Prices have pushed above $3.19, the pivot point calculated from the previous period’s high, low, and close. Traders often use pivot levels to assess whether short-term direction favors buyers or sellers.
Resistance is seen at $3.34, followed by $3.45. Support is located at $3.19, followed by $3.08. The move above the slower moving average adds to the constructive tone, suggesting buyers have regained short-term control as long as the market holds above the pivot.
RSI is near 80, which places natural gas in overbought territory. That means prices have risen quickly, so a pause or pullback would not be surprising. Still, the bias remains bullish while gas holds $3.19. A close above $3.34 would bring $3.45 into focus for traders watching the next upside extension.
Frequently Asked Questions (FAQs)
Why did oil prices fall?
Oil prices fell as President Trump signaled he would hold off on new military strikes against Iran for now, prompting traders to reduce the risk premium tied to possible supply disruptions around the Strait of Hormuz.
What was Brent’s latest settlement level?
Brent settled at $92.57 on Monday, its lowest level since August 31, after a 16% weekly decline that marked its steepest weekly drop since the start of the Covid-19 pandemic.
Is the Strait of Hormuz risk gone?
No. The US naval blockade remains in place for now, and talks remain fragile. However, market participants appear to be pricing less immediate escalation after the more restrained tone from Washington.
What are the key WTI levels to watch?
WTI is trading near $85.35, with support at $85.03 and then $77.22. Resistance is at $93.33 and then near the broken channel floor around $95.
What are the key Brent levels to watch?
January Brent futures are trading near $91.36. Support is at $84.28 and then $76.90, while resistance is at $93.28 and then $100.70.
Why did natural gas rise while oil fell?
Natural gas rose on colder weather forecasts, lower Lower 48 output, and strong LNG feedgas demand. Those drivers are separate from the geopolitical factors weighing on crude.
How strong is LNG demand for US natural gas?
Feedgas to the nine big US LNG plants averaged a record 19.3 bcfd so far in November, above October’s record of 18.4 bcfd, adding to demand for domestic gas supply.
What is the key natural gas pivot level?
The key pivot level is $3.19. Technical traders see the bias as bullish while natural gas holds above that level, with resistance at $3.34 and $3.45.
What does oversold mean for oil?
Oversold means prices have fallen quickly according to RSI readings. WTI RSI is near 26 and Brent RSI is near 25, which can allow a short bounce, though it does not guarantee a lasting recovery.