• WTI Oil prices hold just above $86 after falling nearly 15% so far this week.
• Trump’s defeat in the midterm elections has boosted hopes of a quick end to Iran’s war.
• The technical picture shows price action clinging to support at the key 200-day SMA.

Oil prices are showing their sharpest weekly decline in months, as the landslide Democratic victory in the US midterm elections has boosted hopes of an end to the war against Iran. The US benchmark West Texas Intermediate (WTI) barrel has dropped 14.25% so far this week, trading at $87.50 at the time of writing after testing support at the 200-day Simple Moving Average (SMA) near $86.00.

Crude prices plummeted on Wednesday as the resounding defeat of US President Donald Trump in the midterm elections confirmed the disapproval of the Republicans’ policies, mainly the war in Iran and the consequences of the energy shock stemming from it.

Trump said on Wednesday that he does not regret the intervention in Iran, but he also affirmed that the US has no immediate plans to resume the hostilities in an interview with the Financial Times. Also on Wednesday, Vice President JD Vance pointed out to Iran’s war as the main reason for the election results, which has boosted hopes that the government will look for a quick exit from the conflict

Meanwhile, Iran’s Islamic Republican Guard Corps (IRGC) said on Thursday that two Oil tankers caught fire after attempting to cross the Strairtt of Hormuz through what they called “an unauthorised route”. This is keeping Crude prices from falling further amid ongoing concerns about supply disruptions.

Technical Analysis: WTI is testing key support around $86.00

WTI US Oil trades at $87.52, holding marginally above the 200-day simple moving average (SMA) with momentum deteriorating sharply. The Relative Strength Index (RSI) in the daily chart has slid to 36.5, and the Moving Average Convergence Divergence (MACD) line has crossed below the Signal line, with the histogram turning more negative, which highlights that the recent pullback is gaining traction despite the still-positive broader trend backdrop.

A confirmation below the mentioned $86.00 area will be seen as a signal of a trend shift, and increase pressure towards the late August lows near $79.30 and the August 3 low near $73.50. On the topside, first resistance emerges at the previous support area around $94.50 (November 2 low), ahead of last week’s highs above $103.67.