Brent crude fell from $117.64 to $98.32 last week, down about 16% in a week (on a continuous-contract basis)—its largest weekly decline since the 2020 COVID-19 pandemic. In dollar terms, it fell $19.32 in a week, the largest absolute weekly drop since records began in 1988. On Monday, oil traded in a narrow range near $98, while U.S. West Texas Intermediate was around $91, down about 13% for the week to $90.83.
The five-day timeline was a roller coaster: on Monday, November 3, prices first fell about 11% to $104.77. On Wednesday, after news was confirmed that Democrats had won both chambers in the U.S. midterm elections, prices dropped more than 8% in a single day, hitting an intraday low of $93.22. On Thursday, news of an attack on an oil tanker sent prices rebounding 3.9% to $98.29. On Friday, they closed flat at $98.32.
The trigger wasn’t supply and demand, but politics. Senate Democratic leader Chuck Schumer pledged on Wednesday to block a war with Iran, saying some Republican senators supported him. U.S. President Donald Trump also said there would be no further strikes if negotiations made progress. Once the market heard that escalation was unlikely, the war premium that had built up over several months evaporated in a matter of days. The war premium is the extra amount buyers pay out of fear of war and disruptions to supply through the Strait of Hormuz. The premium on Middle Eastern spot crude has already returned to pre-conflict levels. Iran sent a nuclear proposal via Qatar, with conditions including lifting the naval blockade, easing sanctions, and unfreezing assets, but the terms have not been confirmed and negotiations have not reached an agreement.
Saturday gave the market a stark reminder: U.S. forces damaged a cargo ship in the Gulf of Oman that was attempting to break the blockade on Iran; Iran’s Revolutionary Guard said two oil tankers caught fire after hitting mines in the Strait of Hormuz; and the UK Maritime Trade Operations office also reported that a tanker had been hit by an unidentified projectile. No agreement has been signed, and ships are still coming under attack.
Three scenarios, with price levels all on the table: Eurasia Group puts the odds of continued fighting at 60% and the chance of a deal at just 10%; if the conflict escalates, Brent could return to $110–$125. Commonwealth Bank of Australia analyst Vivek Dhar believes that if a deal is reached and the blockade is lifted, Brent could fall to $70–$85. If talks stall, prices could trade sideways at $93–$98; analyst Sugandha Sachdeva puts short-term support at $93.
Last week’s oil-price floor wasn’t one the market hit by falling—it was one it reached by betting, on Washington and Tehran managing to reach an agreement. $93 is the first line of defense, and $98 is the dividing line between bulls and bears. If prices can’t hold above $100, don’t talk about a reversal. In the same week, gold rose about 5% while the energy sector fell 11.9%: safe-haven money and war-premium money took opposite paths. The sharp drop in oil prices is good news for the U.S. October Consumer Price Index, due Tuesday at 21:30 Beijing time, as gasoline is cheaper. But don’t expect that alone to bring the probability of a December Fed rate hike down from around 78%: core inflation is driven by rents and wages, not oil prices.
Three risks to watch: if negotiations collapse or another tanker is attacked, the premium could return overnight; if OPEC’s monthly report on Wednesday and the U.S. Energy Information Administration’s outlook hint at support for prices, short sellers may cover their positions; and don’t mistake $98 for a bargain to buy on the dip. A war premium takes three days to evaporate, but only one sea mine to bring it back.
#原油 #Brent crude
The five-day timeline was a roller coaster: on Monday, November 3, prices first fell about 11% to $104.77. On Wednesday, after news was confirmed that Democrats had won both chambers in the U.S. midterm elections, prices dropped more than 8% in a single day, hitting an intraday low of $93.22. On Thursday, news of an attack on an oil tanker sent prices rebounding 3.9% to $98.29. On Friday, they closed flat at $98.32.
The trigger wasn’t supply and demand, but politics. Senate Democratic leader Chuck Schumer pledged on Wednesday to block a war with Iran, saying some Republican senators supported him. U.S. President Donald Trump also said there would be no further strikes if negotiations made progress. Once the market heard that escalation was unlikely, the war premium that had built up over several months evaporated in a matter of days. The war premium is the extra amount buyers pay out of fear of war and disruptions to supply through the Strait of Hormuz. The premium on Middle Eastern spot crude has already returned to pre-conflict levels. Iran sent a nuclear proposal via Qatar, with conditions including lifting the naval blockade, easing sanctions, and unfreezing assets, but the terms have not been confirmed and negotiations have not reached an agreement.
Saturday gave the market a stark reminder: U.S. forces damaged a cargo ship in the Gulf of Oman that was attempting to break the blockade on Iran; Iran’s Revolutionary Guard said two oil tankers caught fire after hitting mines in the Strait of Hormuz; and the UK Maritime Trade Operations office also reported that a tanker had been hit by an unidentified projectile. No agreement has been signed, and ships are still coming under attack.
Three scenarios, with price levels all on the table: Eurasia Group puts the odds of continued fighting at 60% and the chance of a deal at just 10%; if the conflict escalates, Brent could return to $110–$125. Commonwealth Bank of Australia analyst Vivek Dhar believes that if a deal is reached and the blockade is lifted, Brent could fall to $70–$85. If talks stall, prices could trade sideways at $93–$98; analyst Sugandha Sachdeva puts short-term support at $93.
Last week’s oil-price floor wasn’t one the market hit by falling—it was one it reached by betting, on Washington and Tehran managing to reach an agreement. $93 is the first line of defense, and $98 is the dividing line between bulls and bears. If prices can’t hold above $100, don’t talk about a reversal. In the same week, gold rose about 5% while the energy sector fell 11.9%: safe-haven money and war-premium money took opposite paths. The sharp drop in oil prices is good news for the U.S. October Consumer Price Index, due Tuesday at 21:30 Beijing time, as gasoline is cheaper. But don’t expect that alone to bring the probability of a December Fed rate hike down from around 78%: core inflation is driven by rents and wages, not oil prices.
Three risks to watch: if negotiations collapse or another tanker is attacked, the premium could return overnight; if OPEC’s monthly report on Wednesday and the U.S. Energy Information Administration’s outlook hint at support for prices, short sellers may cover their positions; and don’t mistake $98 for a bargain to buy on the dip. A war premium takes three days to evaporate, but only one sea mine to bring it back.
#原油 #Brent crude