Oil reversed earlier gains and resumed declines on Monday as news reports indicated progress in U.S.-Iran talks. US barrel benchmark West Texas Intermediate (WTI) is down around $2.50 from session highs and is hovering around $75.00 at the time of writing.
On Monday, negotiators from Qatar and Pakistan said in a joint statement that Washington and Tehran had committed to developing an action plan to end the conflict “on all fronts” within 60 days and reopen the Strait of Hormuz. The mediators also confirmed that a line of communication had been opened to avoid incidents and misunderstandings in communication between the rival countries.
The news calmed investors who were nervous when U.S. President Donald Trump threatened to “take over” the country and prompted Iranian negotiators to leave the talks at one point. Uncertainty about the outcome of the talks caused WTI oil prices to peak at around $78.00 during weekly opening hours.
Technical Analysis: The channel low near $71.00 may attract bears
The price of WTI crude oil is at USD 75.20, remaining in the lower half of the descending channel, and momentum indicators indicate an overwhelmingly bearish trend. The 4-hour Relative Strength Index (RSI) remains capped below the midline, although the moving average convergence divergence (MACD) at a positive level suggests that the negative momentum may have abated somewhat.
Session lows are at $74.88, protecting the path to Friday’s low in the $72.80 area. However, bears may be tempted to test the bottom of the descending channel, which is currently around $71.15.
Upside, initial resistance comes at the June 15 low and June 17 high around $78.60. Further up, the June 12 low, just above $82, and the channel high, currently around $84.00, are expected to provide significant resistance for the bulls.
(The technical analysis for this story was written with the facilitate of an AI tool.)
Frequently asked questions about WTI crude oil
WTI Oil is a type of crude oil sold on international markets. WTI stands for West Texas Intermediate, one of three main types, including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” due to its relatively low weight and low sulfur content. It is considered a high-quality oil that can be easily refined. It originates in the United States and is distributed through the Cushing Junction, considered the “Crossroads of the World.” It is a reference point for the crude oil market, and the WTI price is often quoted in the media.
Like all assets, supply and demand are key factors influencing the price of WTI crude oil. Therefore, global growth may drive increased demand and, conversely, frail global growth. Political instability, wars and sanctions can disrupt supply and affect prices. Another key factor shaping prices are the decisions of OPEC, the group of major oil-producing countries. The value of the US dollar affects the price of WTI crude oil because oil is mainly sold in US dollars, so a weaker US dollar can make oil more affordable and vice versa.
Weekly crude oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Administration (EIA) influence the price of WTI crude oil. Inventory changes reflect fluctuations in supply and demand. If the data shows a decline in inventories, it may indicate increased demand, which will result in an boost in the price of oil. Higher inventories may reflect increased supply, which causes prices to fall. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar and are within 1% of each other 75% of the time. EIA data is considered more reliable because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 oil-producing countries that jointly decide on production quotas for member countries at meetings held twice a year. Their decisions often influence the prices of WTI crude oil. When OPEC decides to cut quotas, it can tighten supply, which will push up oil prices. OPEC increasing production has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, the most notable of which is Russia.
