Key Highlights

● WTI settled at $102.00 on Thursday, down 78 cents.

● WTI has held above $100 a barrel since the week of October 23.

● Crude was down more than $2 at one point before buyers returned.

● Traders are pricing the risk of a US strike on Iran after November 3.

US crude slipped 78 cents on Thursday but held its ground above the $100 mark, as diplomatic hopes and fresh Supply threats pulled the market in opposite directions.

The settlement

West Texas Intermediate crude, the US benchmark, settled at $102.00 a barrel on Thursday, October 29, down 78 cents, according to media reports. That kept WTI above $100, a level it has held since the week of October 23, according to market commentary.

The modest decline masked a turbulent session. WTI had been down more than $2 at one point during the day, according to media reports, before buyers stepped back in. A midday snapshot put WTI at $100.44, perilously close to giving up the triple-digit threshold.

Thursday's dip followed a strong Wednesday, when WTI rallied sharply, according to media reports. Some giveback was natural after that kind of move, especially with diplomatic headlines offering traders a reason to take profits.

One Commodity analyst summed up the morning pressure: "Oil prices are under pressure today amid renewed diplomatic efforts to de-escalate the conflict in the Middle East," he said, according to media reports.

The case for lower prices

Several developments pointed toward easing tensions. Vice President JD Vance sent a letter to Mohsen Rezaei, head of Iran's Supreme National Security Council, according to media reports. A Qatari draft deal was also in circulation.

Any credible path to a ceasefire or agreement would reduce the risk premium built into crude, which explains why prices sank early in the session.

The case for higher prices

The bullish forces proved just as strong. An Iranian official called the Qatari draft deal "unacceptable," according to media reports. Houthi strikes hit Saudi energy facilities. Iran's Revolutionary Guard said three tankers hit sea mines south of the Strait of Hormuz. Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) cancelled executive travel to an oil show in the United Arab Emirates.

Traders are also pricing the risk of a US strike on Iran after the November 3 midterm elections, according to media reports and another source. One research firm noted that "threats to regional infrastructure remain active despite the renewed push for negotiations."

Those headlines helped WTI recover most of its intraday losses and finish well above $100.

Supply data was mixed

Government inventory figures offered support. The Energy Information Administration reported falling US crude and distillate stocks, while gasoline inventories rose, according to media reports. Another source put the crude draw at 1.9 million barrels and the gasoline build at 3.9 million barrels.

A crude draw generally signals tighter supply at home, which tends to support WTI specifically, since it is priced at Cushing, Oklahoma, and reflects US conditions more directly than Brent.

Ripple effects

Triple-digit oil has broad consequences. September's PCE data, released Thursday, showed gasoline and energy costs jumping, according to one report, and headline Inflation heating up. That strengthens the case for a Fed hike in December, according to one Wealth advisor, who said, "Today's data strengthens the case for another rate increase in December."

In the stock market, the energy sector dipped at midday, according to market data, as crude trimmed some of its war premium. The S&P 500 slipped 23.59 points to 7,720.39 overall.

What to watch

The $100 line is the market's psychological battleground. A breakthrough in diplomacy could send WTI below it; another attack on tankers or energy facilities could send it higher.

Friday brings Earnings from Chevron, according to market commentary, offering a look at how oil majors are handling elevated prices. Beyond that, the November 3 midterms loom as a key event for traders weighing the risk of further military action involving Iran.