Traders are certain WTI crude oil will fall to $85 a barrel

Traders now treat it as certain that WTI crude will fall to $85 a barrel in November, after the U.S. benchmark slid to within two cents of that level on Monday.

The December WTI futures contract fell to $85.02 a barrel on Nov. 9 as traders weighed the possibility of de-escalation between the United States and Iran, according to DTN and the Associated Press's futures table. That low did not by itself show WTI reaching $85, and it is not confirmed that the level was reached. Which price and which contract month count has not been specified.

Other figures point in different directions. The January contract traded below $85 on Monday. A separate FXStreet report said WTI traded below $85 on Tuesday, but that account conflicts with December-contract figures from DTN and the Financial Times, so it does not establish the outcome.

Bets on a drop to $85 had been likely but far from sure for most of the past week. They jumped on Nov. 4 as oil sold off, eased the next day as prices rebounded, and held roughly steady through the weekend. They climbed sharply on Monday as crude approached the threshold, then rose through the night to certainty early Tuesday.

Traders are also looking further down. A fall to $80 this month is now seen as likely, after being viewed as unlikely a week ago. A rally is seen as less plausible than before: a climb to $105 or $110 in November remains unlikely, and the odds of either have slipped.

The slide follows a sharp drop in oil after the U.S. midterm election. Axios reported on Nov. 4 that traders expected less escalation in the Iran war. December WTI settled at $88.12 that day, rebounded to $90.52 on Nov. 5 and settled at $90.83 on Nov. 6, before dropping to a settlement of $86.85 on Monday and touching $85.02 afterward.

What comes next depends on further WTI trading and on any clarification of which price series and method decide the question. The U.S. Energy Information Administration had scheduled its next Short-Term Energy Outlook for Tuesday.