West Texas Intermediate (WTI) US Oil prices fell sharply on Tuesday, trading around $75.70 per barrel at the time of writing, marking a 3.91% decline on the day and reaching the lowest level in the past three weeks [1]. The sell-off was triggered by statements from US Treasury Secretary Scott Bessent, who told CNBC that ongoing talks with Iran could result in a deal as soon as Tuesday or Wednesday to reopen the Strait of Hormuz and move toward normalizing the conflict. Bessent also stated that, if an agreement is reached, he expects energy prices to 'settle back down' [1].
Diplomatic efforts are being closely coordinated by Qatar, Pakistan, and Oman, according to Qatar's Foreign Ministry spokesperson Majed Al Ansari, who emphasized that returning to the negotiating table is the immediate priority. Al Ansari confirmed that negotiations between the United States and Iran are continuing, with both sides exchanging proposals [1]. Additionally, a senior official cited by Al Arabiya indicated that an announcement regarding the reopening of the Strait of Hormuz could be imminent, though no official confirmation has been released [1].
The improving geopolitical outlook has eased concerns over potential disruptions to global oil supplies, which has contributed to the sharp decline in crude prices [1]. Technical analysis shows WTI trading well below key moving averages, with the price under the 100-period SMA at $81.03 and the 200-period SMA at $82.91, reinforcing a bearish near-term bias. The Relative Strength Index (RSI) is around 35, approaching oversold territory, suggesting that while selling pressure remains, a corrective bounce is possible [1].
Initial resistance for WTI is seen at $77.40, with stronger resistance at the 100-period and 200-period SMAs, while the downside bias is expected to persist as long as prices remain below $77.40 [1].
CONCLUSION
WTI oil prices experienced a significant drop amid optimism for a US-Iran deal and the potential reopening of the Strait of Hormuz, alleviating supply disruption fears. The market remains bearish in the near term, with technical indicators suggesting continued downside pressure unless prices recover above key resistance levels.