WTI Crude Settles at $96.09 as US-Iran Diplomacy Hopes Trigger Sharp Swings in Oil Markets

Oil markets whipsawed on November 3 as competing signals around US-Iran diplomatic progress drove Brent crude down more than 7% intraday to roughly $104.77 per barrel and WTI to about $96.46, before both benchmarks partially recovered. December WTI futures ultimately settled at $96.09 per barrel, down 37 cents or 0.38%, a two-week low, while NYMEX RBOB gasoline settled at $2.9355 per gallon and natural gas at $2.8950 per MMBtu.

President Donald Trump said oil prices were dropping "like a rock," citing signs that Iran wanted a deal "as soon as possible" and suggesting an agreement "could happen." Iranian President Masoud Pezeshkian said Tehran was pursuing dialogue and that Supreme Leader Mojtaba Khamenei had granted his government expanded authority to negotiate. That diplomatic optimism marked a reversal from Trump's earlier position that Washington was not negotiating with Iran.

The picture grew more complicated when the US carried out fresh strikes on targets on Iran's Qeshm Island, which American officials described as defensive. Oil prices recovered some of their losses on that news, with WTI moving back toward $97 and Brent rising above $105, underscoring how sensitive energy markets remain to developments around the Strait of Hormuz. Brent had already fallen from above $110 the prior week on the initial wave of diplomatic optimism.

Market behavior late in the session illustrated the dynamic clearly: reports before the US open that Washington had approved a draft Iran deal sent S&P futures up 0.5% and pushed oil briefly below $95. Iran then denied any such deal existed, yet oil did not rebound and stocks did not sell off, suggesting traders have grown conditioned to a near-daily cycle of bullish Iran headlines followed by denials. Goldman Sachs has warned that Brent could reach $140 in 2027 if Gulf production remains heavily disrupted.

In the physical oil market, front-end Dated Brent continued to trade in contango, with the first two weeks of CFD rolls at minus 60 and minus 25 cents per barrel per week respectively, pointing to ongoing softness in near-term demand for crude. API inventory data added a supply-side wrinkle: actual crude draws over the prior three weeks totaled 18 million barrels against analyst forecasts of a 1.4 million barrel build, a persistent gap analysts attributed partly to policy-driven draws from strategic petroleum reserves in the US, China, and Japan rather than a broad commercial stock decline. Analysts tracking the Middle East conflict flagged four specific risks if hostilities intensify: expanded ship attacks slowing crude recovery, further pressure on non-crude commodities, an amplified Iranian maritime disinformation campaign, and a potential double-front scenario combining Iranian and Houthi attacks against Saudi Arabia alongside action by Iran-aligned Iraqi armed groups.