West Texas Intermediate (WTI) US Crude Oil prices dropped below $63.00 as US-Iran nuclear discussions advanced, potentially increasing global oil supply from Iran. WTI is trading around $62.80, approximately 1.5% down for the day after reaching a high above $64.00 on Friday.
The US and Iran have agreed to start expert-level talks for a possible nuclear deal, with discussions beginning in Oman. Moreover, a temporary ceasefire announced by Russia’s President in Ukraine has raised hopes for easing tensions, potentially affecting crude oil prices.
Impact Of Weaker US Dollar
A weaker US Dollar, which normally benefits commodities priced in USD, is preventing significant bearish movements in WTI prices. Market participants are likely waiting for more robust selling trends or data, such as upcoming flash PMIs, to assess global economic health before making decisions.
WTI Oil is a high-quality crude sourced from the US and is a key benchmark in the oil market. Its price is driven by supply-demand dynamics, political events, OPEC decisions, and US Dollar value. Regular Oil inventory reports by the API and EIA provide insights into market conditions, affecting price movements.
OPEC influences WTI prices through production quotas, impacting global oil supply; any changes can affect market trends significantly.
We’ve seen West Texas Intermediate crude futures soften as renewed diplomatic engagement between Washington and Tehran gains traction. Talks are progressing at a technical level in Oman, suggesting an eventual easing of sanctions and a likely pickup in Iranian exports if negotiations succeed. Brent markets are watching closely too, but WTI, more sensitive to US policy shifts, felt downward pressure early in the session, dipping roughly 1.5% lower from Friday’s close.
Geopolitical Uncertainty And Market Reactions
A lull in geopolitical uncertainty—especially following announcements from the Kremlin regarding a temporary halt in military operations—adds to the short-term bearish pressure. Although the move does not represent a resolution, it has offered lighter sentiment to markets that often react quickly to such gestures, however transitory they may be. We read this as feeding into broader supply confidence.
Despite that softening, the US Dollar’s current weakness offers a supportive base under crude prices, as dollar-denominated commodities become more attractive to foreign buyers. This currency dynamic doesn’t alter the supply picture fundamentally, but it delays sharper retracements in futures pricing.
Market positioning has, so far, leaned cautious. There’s clearly a wait-and-see attitude ahead of global macro data, notably flash PMI readings. Those data points, due soon, are expected to be scrutinised for signs of resilience or contraction in manufacturing. These figures often serve as a proxy for industrial oil demand, particularly in Asia and Europe, and can shift curves if divergences appear across regions.
What’s developed, particularly over the past fortnight, is a zone of narrow movement in the $62–$65 range, formed by push-pull effects between diplomatic optimism and baseline support for risk assets. Any solid deviation from this range would likely require either notable inventory drawdowns in the next API or EIA reports or a tangible breakdown in talks concerning Iran’s nuclear programme. Until one of those catalysts materialises, low volatility is likely to define short-term trade.
OPEC’s broader role remains active but currently subdued. The group hasn’t indicated a change in output policy, which is why the price pressure we’ve seen isn’t being counteracted in a material way. Nonetheless, any surprise commentary or off-schedule adjustments—particularly from key producers like Saudi Arabia—could quickly shape forward curves and spreads.
Overall, these developments suggest a moderate retracement phase but not a full reversal. We interpret price action around the 50- and 100-day moving averages as technical zones of interest. Near-term trendlines are slightly tilted downward, but any meaningful break would require more than discussion headlines.
As such, if positioning in the options market suggests an uptick in implied volatility, that would signal a readiness to price in broader shifts. For now, energy markets are pricing only moderate risk, but the foundation is being laid for diverging paths depending on a few key outcomes. We continue to monitor demand-side readings, particularly from high-frequency shipping and refinery data, which have yet to reflect any surge or collapse.
