Crude settles at $86.53 as Hormuz risk tests a short setup

By Daniel Okafor

NYMEX’s December crude contract settled at $86.53 a barrel Wednesday, up 49 cents, or 0.57%, its first higher settlement after two lower closes.

What did Wednesday’s crude session show?

The contract traded between $88.74 and $85.81, a $2.93 range and about 3.4% of the settle. That was the narrowest daily range since Oct. 30, 2026, while also producing a higher high and a higher low than Tuesday.

The low printed in the 4:00 a.m. ET bar. The high came in the 10:00 a.m. ET bar, the highest level since Nov. 9, 2026. The market then surrendered most of the early gain.

The noon bar lost 88 cents. The 2:00 p.m. bar lost another 87 cents, leaving the contract at $86.40 before the close. The $86.53 settlement finished only 24.6% of the way through the session range, in its lower quarter.

From 2:26 p.m. ET, the news feed carried reports that the U.S. vice president was considering “direct talks” with a senior Iranian official. The price decline and those reports coincided; the sequence does not prove one caused the other. MyAlgoIndex attributed the early gain to short covering as U.S.-Iran talks stalled. That was the provider’s explanation, not a demonstrated cause.

Brent’s January contract rose 1.39% to $92.76, and heating oil gained 1.95%. Gasoline slipped 0.05%, while the dollar index rose 0.67% to 102.91. After settlement, a statement attributed to an Iranian military official said the Strait of Hormuz “remains closed.”

The analysis offered no refinery, terminal or producing-play metric. Its physical reference point was the Strait of Hormuz, where a closure statement and reports of possible direct talks framed the NYMEX benchmark.

Takeaway: The early rally faded, and sellers held the lower quarter of the range.

Where do the technical levels sit?

After settlement, MyAlgoIndex’s composite multi-indicator read was 24% sell with minimum strength, compared with 32% sell in the prior session. Negative direction led both directional systems.

The settle remained below the 5-day, 9-day, 20-day and 50-day settlement averages. It sat below the 20-day average for an eighth session, yet remained above the 100-day and 200-day averages.

MyAlgoIndex read the bias as neutral to lower below Pivot R1 at $88.24, expecting a rebound toward that level as the more likely first test and a stall below Wednesday’s $88.74 high as the base case.

All levels below apply to the December contract.

Resistance

• $89.96: Pivot R2.
• $88.85: One-standard-deviation resistance.
• $88.74: Wednesday’s session high.
• $88.33: Stall of the 14-day %K line.
• $88.24: Pivot R1.
• $88.15: 5-day settlement average.
• $87.49: 38.2% retracement from the 13-week low.
• $87.03: Pivot Point.

Support

• $86.53: Wednesday’s settle.
• $86.13: 61.8% retracement from the 52-week low.
• $85.81: Wednesday’s session low.
• $85.31: Pivot S1.
• $84.21: One-standard-deviation support.
• $84.10: Pivot S2.
• $83.88: One-month low.
• $82.38: Pivot S3.

Takeaway: The first test is $88.24 to $88.74, and failure there points toward $85.81.

How is the short setup structured?

The proposed setup called for a short in the December contract from an $87.80-$88.10 entry band, positioned between the Pivot Point at $87.03 and Pivot R1 at $88.24.

The stop was $88.80, above Wednesday’s $88.74 high but below one-standard-deviation resistance at $88.85. Targets were $87.10 first, above the Pivot Point; $86.25 second, below the settlement and above the $86.13 retracement; and $85.40 third, just above Pivot S1 at $85.31.

From the entry midpoint, risk-to-reward was roughly 1:1 to the first target, 1:2 to the second and 1:3 to the third. The 14-day average true range was 4.35 points, more than five times the 0.85-point stop distance.

A settlement above $88.74 would negate the thesis. Two consecutive 30-minute closes above $88.10 would remove the setup’s edge before the stop was reached.

Takeaway: The trade depends on selling a rebound into resistance, rather than chasing weakness.

What can break the setup?

The weekly government petroleum report, delayed by the holiday, was scheduled for 12:00 p.m. ET on Thursday, November 12, 2026, according to the verified forward calendar. A large crude draw could carry price through the stop in one move. So could another statement that the Strait stays closed, or reports that U.S.-Iran talks had broken down.

MyAlgoIndex framed the base case as a test of whether a rebound stalls within the $88.24-$88.74 band before the report. The alternative was an extension through Wednesday’s $85.81 low toward Pivot S2 at $84.10. The chart’s judgment was that rebounds toward Pivot R1 should be sold.

The watch items are the noon report, the next Hormuz statement and the status of direct talks. The chart waits for one of them to break the range.

Takeaway: The next clean signal comes from the report, the strait or the talks.