Oil price forecast: WTI and Brent plunge after US midterm elections
ITF Team3 min read
WTI fell below $87 and Brent slipped toward $90 as US‑Iran peace hopes surged after the November 5, 2026 midterm election, with inventories dropping 865,000 barrels.
Key takeaways
- WTI crude fell to $88.05 on Nov 5, 2026, a drop of 9.81% from the previous close.
- Brent crude fell to $96.84 on Nov 5, 2026, a decline of 10.01% from the previous close.
- US crude inventories fell by 865,000 barrels, while distillate stocks dropped 3.6 million barrels in the latest weekly report.
- Technical analysis shows WTI support at $87 and a potential move toward $78 if that level is broken.
Oil markets slumped on Nov 5, 2026, after the U.S. midterm election results raised expectations of a diplomatic breakthrough between Washington and Tehran. Brent crude slid more than 9% to $96.84, while the U.S. benchmark WTI fell 9.81% to $88.05, testing the $87 support zone. The move reflects heightened optimism that a Democratic‑controlled Congress could pressure President Trump to pursue a peace deal, easing shipping risks in the Gulf of Oman.
Election outcome fuels peace‑deal optimism
The midterm vote shifted the balance of power toward the Democrats, who have signaled a willingness to engage Tehran on a nuclear and maritime agreement. Traders priced in the possibility that reduced geopolitical tension would lift the shipping bottleneck that has historically constrained supply, prompting a rapid sell‑off in crude. The narrative is simple: fewer threats to tanker routes mean more oil can flow to market, compressing prices.
Analysts note that even a tentative understanding could dampen the risk premium embedded in oil contracts. While no formal deal was announced, the market reaction was immediate, with futures contracts on both exchanges dropping sharply as investors re‑priced the risk of supply disruptions.
Inventory data adds a twist
Complicating the picture, the latest weekly Energy Information Administration (EIA) report showed U.S. crude inventories fell by 865,000 barrels, and distillate stocks slipped 3.6 million barrels. The drawdown, though modest, removes a buffer that could have softened the price fall. With less stockpile protection, any fresh supply shock—such as a renewed flare‑up in the Strait of Hormuz—could quickly reverse the downward trend.
Traders therefore remain cautious. The inventory decline suggests that demand is holding, but the market is now more sensitive to geopolitical news. A sudden escalation would likely trigger a rapid rebound, as seen in previous episodes when tanker attacks spiked prices within hours.
Read also: Canadian dollar gains as US Treasury yields fall and oil rises
Technical outlook for WTI
WTI’s daily chart shows a decisive break below the 200‑day simple moving average (SMA) near $87. The price failed to sustain a rally above the $104‑$106 double‑top zone in late October, and the subsequent decline has steered it toward the $87 support line identified by FXEmpire analysts. A breach of this level could open a path to $78, a zone defined by a rising trendline that began in December 2025.
On the 4‑hour chart, $87 has acted as a strong barrier during July‑August’s bullish swing. The current price action, hovering just above that mark, suggests that a decisive move below could trigger a short‑term slide toward $80, before testing the $78 foothold.
Brent’s bearish trajectory
Brent’s daily chart mirrors WTI’s pattern, with the price closing below its 200‑day SMA after failing to breach the $120 resistance in October. The weekly chart shows a 16% loss for the week, reinforcing the bearish bias. Analysts project that the next significant hurdle lies at $90, with the $70‑$72 range still a year‑to‑date low that could become a target if the downtrend persists.
The sideways range between $72 and $120 that defined most of 2026 has now narrowed, and the recent failure to clear $120 suggests a shift toward the lower end of that band. Traders will watch the $90 level closely, as a breach could accelerate the move toward the $70 zone.
What to watch next
Key events to monitor include any official statements from the U.S. State Department or Iranian foreign ministry indicating progress on a peace framework. Additionally, the next EIA inventory report, due on Nov 12, will reveal whether stock draws continue or reverse, influencing short‑term price dynamics.
- Watch for U.S. congressional hearings on Iran policy (Nov 14‑15)
- EIA weekly crude inventory report (Nov 12)
- Potential OPEC+ production decisions (Nov 20)
Frequently asked questions
Why did oil prices drop after the US midterm elections?
The election shifted control toward Democrats, raising expectations that Congress would pressure President Trump to negotiate a peace deal with Iran. Reduced geopolitical risk in the Gulf lowers the supply risk premium, prompting a sell‑off in both Brent and WTI crude.
What technical level could trigger further decline in WTI?
WTI is testing the $87 support line, which coincides with its 200‑day SMA. A break below $87 could open a path toward $78, a level defined by a rising trendline that began in December 2025.
Official data sources
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This article is compiled from international market news for information only. It is not investment advice.