Oil climbed on Nov 11, as traders weighed mixed signals on the prospects for a conclusion to the Iran war.
While US President Donald Trump has said further strikes on Iran would not be necessary, regional flare-ups have persisted and peace talks have shown little progress. Iran will not remove “a single atom” of enriched nuclear material from the country, Secretary of the Supreme National Security Council Mohsen Rezaee said in an interview with Al Mayadeen.
West Texas Intermediate futures rose above US$86 a barrel after sliding about 5% in the previous two days, while Brent closed near US$93.
“We’ve shifted from a market that needed things to get worse to move higher, to one where things simply not getting better could be enough to push prices up,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.
The US benchmark is up roughly 50% this year, but the market has reversed sharply in November, with Brent tumbling from a six-month high on hopes the conflict will ease and as Persian Gulf energy exports rise. Saudi Arabia’s crude output climbed 26% in October to the highest since the war began despite attacks on ships, as a recovery in regional flows pushes prices lower.
Saudi Arabia told OPEC that its output rose to 10.56 million barrels a day in October, according to a monthly report seen by Bloomberg from the organisation’s secretariat. The bigger flows from the Saudis and other exporters around the Persian Gulf are showing up in physical markets at a time when consumption remains constrained.
“We have seen a sharp re-pricing of the oil market over the past two weeks” as election results in the US and Israel “reduced the likelihood of renewed escalation in the conflict,” said Jens Naervig Pedersen, a strategist at Danske Bank AS. Still, “Iran seems hesitant to meet US demands on its nuclear programme, which may test the durability of the recent decline in oil prices.”
Meanwhile, the American Petroleum Institute reported US crude inventories rose by nine million barrels last week. Stockpiles of distillates such as diesel, which had fallen below 100 million barrels for the first time since 2003, climbed by 1.5 million barrels, API said. Official data is due on Nov 12.
Separately, the Energy Information Administration raised its 2027 forecasts for retail gasoline prices to an average US$3.73 a gallon and diesel to US$5.03, citing tight global fuel supplies. The agency left its US crude production estimate unchanged at 14.3 million barrels a day in its Short-Term Energy Outlook.
A tanker carrying Russian diesel that had briefly signalled a US destination made a U-turn off New York, adding uncertainty over deliveries to the North American market. Last month, Russian President Vladimir Putin agreed to supply fuel to the US and global markets in a deal with Trump, though the arrangement drew criticism from Democrats. BLOOMBERG
