WTI Price Rejected at Downtrend Resistance Amid Iran Diplomatic Hopes

The WTI crude oil price has seen an unusual decline despite the threat of Iranian barrels being removed from the market and energy exports from the Gulf being blocked. This lack of a bullish response raises concerns about the downside risk for the commodity.

Pakistan's interior minister announced significant progress in talks with Iran to restore a signed Memorandum of Understanding (MoU) with the United States, which may reduce the likelihood of US Treasury Secretary Scott Bessent implementing secondary sanctions. However, this development should be taken with caution due to the repeated ebbs and flows in negotiations.

The WTI price was rejected at downtrend resistance running from the March highs last week and completed a three-candle evening star reversal pattern on Monday, which warns that the rally from early August may be unwinding. A break below $83.60 would add confidence to this bearish view, targeting lower levels including $80, where the price found support in mid-month.