- Crude oil prices slipped, with Brent crude around $105.47 per barrel on Friday
- WTI crude traded above $97 after a 3% rise due to Iran's attacks near Strait of Hormuz
- US crude stocks fell by 8 million barrels in the week ending Oct. 9, supporting prices
Crude oil prices slipped slightly on Friday with brent crude holding around $105.47 per barrel levels, after surging past $106 per barrel in the previous session. The gap between American crude, West Texas Intermediate and the global benchmark narrowed, after sharp gains in the former on Thursday.
WTI traded above $97 per barrel, after rising by 3% to $98 per barrel levels in the preceding session as Iran intensified attacks on vessels passing through the Strait of Hormuz. On Wednesday, a cargo ship sank in the Strait of Hormuz after being stuck by an projectile, which was later confirmed to be Iranian.
A huge drawdown of 8 million barrels during the week ended Oct. 9 supported US crude, according to data released by Energy Information Administration. Meanwhile, the US military is once again drawing up plans to strike Iran, despite President Donald Trump having stated they will hold back till after midterm elections (scheduled for Nov. 3, 2026).
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In an unrelated statement, Trump admitted to have gone "a little too far" by taking out Iranian leaders during the war and Iran made him promise "not to take out any more."
Washington is also mulling easing sanctions on shadow fleet vessels in an effort to curb record-high global freight rates, Reuters cited a White House official as saying. The so-called shadow fleet vessels have transported oil and petroleum products from countries including Russia, Iran and ‌Venezuela.
Traders are also critically assessing the prospect of diesel relief from Russia. US President Donald Trump's deal with Russia to supply 4.8 million metric tons, or nearly 36 million barrels total of diesel globally would suffice only a single-day of the cumulative demand, equivalent to 10 days of domestic American demand.
At the same time, the International Energy Agency (IEA) warned that constraints on diesel markets could continue well into 2027, with fresh attacks on Saudi Arabia threatening to derail a recovery on the supply side of the global oil market.
$200/Barrel Level On Cards For Brent?
The market broadly agrees that the worst-case scenario for commodities, feared at the start of the US-Iran war in March this year, has failed to materialise. The worst that the oil market witnessed was in April-end, when Brent futures had climbed to as high as $126 a barrel. Despite the conflict still underway—with both sides appearing on the edge of escalating their military offensives—crude has met a stiff resistance at $110.
That extreme scenario of oil hitting $200, that faded over the summer, is now back in the conversation. The world's biggest independent oil trader says only a makeshift shipping arrangement is keeping it at bay. Meanwhile, crude stocks in the Middle East and the West are near their limits.
For oil to rocket to $200, the rates would need to almost double. At present, December Brent futures are trading at $104.43 a barrel. Based on the views shared by market watchers, here are four factors that keep the scare of a nearly 100% jump in oil rates alive.
WTI, Brent Gap To Bridge?
The gap between the two global oil benchmarks has widened in recent period,compared to three months ago, when they were barely apart. However, the recent surge in WTI has narrowed the difference sharply.
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