Crude Markets Rebound Following Gulf Tanker Attacks
“The market is still looking for evidence of a firm deal being signed, or any backlash from either party could tighten fundamentals once more,” Rystad oil market analyst Janiv Shah said as crude futures saw volatile trading. During afternoon trading, January Brent crude futures climbed 26 cents, or 0.3%, reaching $98.55 a barrel, whereas U.S. West Texas Intermediate futures gained 57 cents, or 0.6%, to hit $91.09.
The partial recovery follows a steep weekly decline triggered by the US midterm elections. Election losses for President Donald Trump’s Republican Party fueled investor optimism regarding a potential de-escalation of the US-Israeli conflict with Iran. However, ongoing vessel attacks in the Middle East continue to provide a solid floor for crude prices.
Flat Brent crude prices (white) have clawed back roughly half of yesterday's selloff But prompt Brent crude timespreads (blue) are back to around Monday highs. pic.twitter.com/gNCsw3K455
Brent crude remains on track for a 16% decline over the week, marking its steepest weekly percentage fall since the start of the Covid-19 pandemic and its largest absolute drop in LSEG data dating back to 1988, RTE reported. U.S. West Texas Intermediate is heading for a 13% weekly loss. The dramatic sell-off in oil aligns with a broader rout across technology stocks.
The previous session saw Brent trade near $94 a barrel, while WTI hovered around $87 following an 8% drop on Wednesday, The Irish Times noted. Vice President JD Vance attributed the Republican midterm setbacks to voter frustration over the war and Washington’s relationship with Israel. Meanwhile, Senate Minority Leader Chuck Schumer pledged to work toward ending the conflict.
oil mkt summary (11/5): Dec WTI +$2.40 to $90.52, Jan Brent +$3.67 to $98.29, snapping a 3-day skid as traders reassessed odds of a quick Iran deal. Dec ULSD +14.6c to $4.35 on a 3.6M bbl US distillate draw, RBOB +3.5c to $2.76. subscribe for more insights on market moves
Iran sends nuclear proposal to Washington through Qatar
According to Reuters, which cited a high-ranking Iranian official, prospects for a diplomatic breakthrough arose after Tehran reportedly transmitted a nuclear plan to Washington via Qatari channels. The overture followed statements from Iranian state media indicating the supreme leader had granted authorities to seek solutions through dialogue.
Bob McNally, founder and president of Rapidan Energy Group, told CNBC that he sees an 80% probability of military fighting resuming, forecasting that both benchmarks could climb back above $100 a barrel as President Trump seeks to block Iran from obtaining a nuclear weapon.
A Democratic midterm sweep is boosting US Treasuries, but ING's James Knightley says political paralysis is unlikely to deliver any meaningful improvement in the US deficit pic.twitter.com/rR9gqhl51o
Iran reports three additional attacks on oil tankers
Physical supply risks persist in the Middle East alongside diplomatic talks. Iran reported three additional attacks on oil tankers in the Strait of Hormuz, and data from the UK Maritime Trade Operations (UKMTO) shows vessel attacks running near record pace, CNBC noted. A Greek ship manager confirmed that a seafarer was killed during a November 5 explosion on an oil products tanker in the Gulf, which was believed to stem from a missile strike.
Dennis Kissler, senior vice president for trading at BOK Financial Securities, told The Irish Times that larger crude exports out of the Persian Gulf are keeping pressure on prices for now. At the same time, refined product inventories remain tight. U.S. distillate stockpiles fell below 100 million barrels last week, reaching their lowest level since 2003.
Frequently Asked Questions About Middle East Oil Supply
How much did oil prices drop following the U.S. midterm elections?
Brent crude dropped over 8% on Wednesday alone, settling at two-month lows, with the weekly decline reaching 16% according to data from LSEG.
What role are maritime security agencies playing in tracking Gulf incidents?
Data from Britain’s maritime security agency UKMTO indicates that attacks on oil-carrying ships in the Gulf and the Strait of Hormuz continue to run at close to a record pace.
🇮🇷🇺🇸 Iran's oil exports are down to almost ZERO, and Tehran is still not ready to make a deal. Iran didn't load a SINGLE BARREL of crude in September or October, with 54 tankers sitting idle off its coast under the U. S. blockade. But with Trump bruised by the midterms, veteran… pic.twitter.com/BzwUfBGlxG
How have distillate and diesel inventories reacted to the ongoing conflicts?
U.S. stockpiles of distillates dropped below 100 million barrels, marking the lowest level recorded since 2003 amid supply constraints driven by Middle Eastern shipping disruptions and attacks on Russian refineries.
What specific diplomatic steps has Iran taken regarding the United States?
Iran reportedly sent a nuclear proposal to Washington through Qatar, while state media reported that the supreme leader granted the government authorities to pursue dialogue with enemies.
🇺🇸🇮🇷 The Iran war is now the BIGGEST near-term economic wildcard for the U. S. If diplomacy holds and energy prices keep falling, Americans could finally get some relief on gas, inflation and borrowing costs. Oil has already dropped sharply over the last few trading sessions as…
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