WTI Crude Oil Prices Struggle as Iranian Supply Risks Fail to Spark Rally

WTI crude oil prices have been struggling to rally despite concerns over Iranian supply risks and blocked energy exports from the Gulf. This unexpected price action has raised questions about where the path of least resistance may lie for crude oil in the near term.

The latest development is that Pakistan's interior minister announced significant progress in talks with Iran aimed at restoring a memorandum of understanding signed with the US earlier this year. However, nothing can be assured, and the repeated ebbs and flows in negotiations mean that these positive headlines should be treated with caution.

From a chart perspective, WTI was comprehensively rejected at downtrend resistance running from the March highs last week. Monday's price action completed an evening star reversal pattern, which could signal that the rally from early August is starting to unwind.

A break and close below $83.60 would add confidence in the prospects for a sustained extension of Monday's move, potentially setting up a shorting opportunity with a target at $80. If WTI were to break its uptrend running from the July lows, it could lead to a retest of the July lows.