Brent Bounces to $97 and WTI to $89.73 as Physical Tightness Fights the Peace Trade — $93 Floor vs $105 Target

Crude found a floor on Thursday, November 5, after the steepest three-day collapse since the pandemic. West Texas Intermediate traded at $89.73 a barrel in the U.S. session, up $1.61, or 1.83%, from Wednesday’s settlement of $88.12. Brent January futures traded at $97.17, up $2.55, or 2.69%, from a $94.62 settlement. WTI’s session range ran from $86.66 to $89.83. Brent’s ran from $93.50 to $97.70. The Brent-WTI spread stood near $7.40.

The bounce follows a historic slide. Brent settled at $117.64 on Friday, October 30. It fell 10.94% to $104.77 on Monday, another 1.12% to $103.60 on Tuesday, and 8.67% to $94.62 on Wednesday. That is a 19.6% drop in three sessions, the largest three-day decline since April 2020. WTI fell 8.3% on Wednesday alone. Both benchmarks settled at their lowest levels since August 31. Overnight in Asia, the slide extended into a fourth day, with Brent touching $93.82 and WTI $86.92 before buyers stepped in.

Context matters here. Even after the crash, Brent is up roughly 52% from a year ago, when it traded near $64. October was a monster month for crude: Brent rose 13.6% and WTI 15.2%, a fourth straight monthly gain, as tanker attacks in the Strait of Hormuz and Houthi strikes on Saudi Arabia pushed both benchmarks to their highest settlements since late April. Brent’s 52-week range runs from $58.72 to $126.41, and WTI’s from $54.98 to $117.63. The war premium has been the dominant force in oil all year.

The thesis for this forecast is direct. The futures market priced a peace deal in three days, but the physical market has not changed. The Strait of Hormuz, which carried a fifth of the world’s crude and LNG before the US-Iran war began on February 28, remains constrained. U.S. crude inventories fell when analysts expected a build. Distillate stocks are at their lowest since 2003. Refiners are running at 94.5% of capacity. Demand is up 4.2% from a year ago. None of that supports Brent below $95. The selloff was driven by political expectations after Tuesday’s Democratic sweep of Congress, not by barrels on the water. That gap between paper and physical is why Thursday’s bounce has legs, and why the forecast leans higher from here unless a real ceasefire materializes.

Anatomy of the Crash: $117.64 to $94.62 in Three Sessions

The selloff did not start with the election. It started with diplomacy. On Monday, November 2, Brent fell nearly 11% as talks aimed at ending the US-Israeli war with Iran, mediated by Qatar, raised hopes of reopening the Strait of Hormuz. Brent traded at $109.75 early Monday and closed at $104.77. WTI fell to $99.71 intraday. The move came despite OPEC+ holding output steady the day before, which would normally support prices.

Tuesday was a pause. Brent slipped 1.12% to $103.60, its lowest close since October 7, as markets waited for U.S. midterm results. The session range ran from $100.80 to $107.24, with traders reluctant to commit before the vote count.

Wednesday was the knockout. Democrats won both chambers of Congress, and the market read the result as reducing the risk of further escalation in the war. Brent opened at $104.23, touched $104.96, then collapsed to $93.22 before settling at $94.62. Volume hit 613,910 contracts, among the heaviest sessions of the year. WTI fell to $88.12.

The logic behind Wednesday’s drop was political. A Democratic Congress can constrain the administration’s military options, and a weakened president facing that Congress has more incentive to seek a deal. Two sources close to Gulf government circles said a full-scale assault on Iran now looks less likely. Futures traders moved to price a faster reopening of Gulf supply.

Thursday’s overnight session extended the slide to a fourth day before the turn. Brent hit $93.82 and WTI $86.92 in early Asian trading. Then buyers returned. By the European open, WTI was at $88.64 and Brent January futures at $96.15. By the U.S. session, both had pushed higher.

What triggered the bounce? Partly technical: a 19.6% three-day drop leaves the market oversold, and short sellers took profits. Partly fundamental: Wednesday afternoon’s government inventory report showed crude and product stocks falling when the market expected builds. And partly political: uncertainty over whether the administration will actually pursue a deal capped the downside. The peace trade had run far ahead of any actual agreement.

The Peace Trade: What the Election Changed and What It Did Not

The election shifted expectations, not facts. The overnight catalyst came from Vice President JD Vance, who posted that the war was the reason his party lost the midterms and suggested pushing for a resolution. That added to the view that the administration now has political reasons to end the conflict. A Democratic Congress also gains oversight over war powers, funding and sanctions, all of which constrain escalation.

What has not changed is the state of the conflict itself. No ceasefire has been signed. Indirect negotiations between Washington and Tehran have been deadlocked for months, and Iran has said the strait will remain shut until seven preconditions are met. Monday’s Qatar-mediated talks raised hopes but produced no agreement. Iran’s army spokesman warned before the election that any renewed war could escalate further.

The physical risk is still active. In the four days before the election, the UK Maritime Trade Operations service logged four separate incidents in and around the strait: advisories 188 and 189 on October 30, 191 on November 1 and 192 on November 2. An offshore tug was struck by a projectile northwest of the Musandam peninsula, with a mayday issued on the emergency channel. An LNG tanker was also hit. Attacks on commercial shipping have intensified even as diplomacy picked up.

Iran’s own fleet is standing still. Ship-tracking data from November 3 showed 76 of 140 Iran-linked tankers holding position outside the Gulf, with only three laden or partly laden. Inside the Gulf, 9 of 25 were laden. Iran is preserving leverage over the strait rather than moving barrels.

The upside scenario for prices is real. Risk assessments put Brent in a $110 to $125 range if escalation resumes. That is 13% to 29% above Thursday’s level. The market spent three sessions pricing the downside case and very little of the upside case.

For the forecast, the peace trade is the swing factor. A signed ceasefire with a credible path to reopening Hormuz would push Brent toward $85 and WTI toward $78. A breakdown in talks or a new attack on Gulf infrastructure would send Brent back above $105 within days. Thursday’s bounce says the market is starting to price the second possibility again.

The Strait of Hormuz: Partial Recovery, Not a Reopening

The Strait of Hormuz is the single biggest variable in the oil market. Before the war, roughly 20% of global crude and LNG moved through it. Since fighting began on February 28, the strait has been effectively closed to normal commercial traffic, with flows depending on which ships Iran allows through and which risk the passage.

Ship-tracking data shows a partial recovery. Flows through the strait averaged 11.7 million barrels a day in October through October 25, up from 9.8 million in September but well below the 14.5 million that moved in February before the war. Seaborne exports from the Gulf, counting crude, condensate and refined products but excluding LNG, ran at 17.1 million barrels a day in October, down from 18.9 million in September. So more oil is moving through the strait itself, but total Gulf exports fell as attacks increased.

The base case among energy-market modelers is a fragile intermediate state. Gulf crude exports are expected to fall toward 9 million barrels a day before gradually recovering to about 10 million by July 2027. Saudi Arabia’s Red Sea export terminal at Yanbu remains constrained at around 2 million barrels a day, leaving combined Gulf exports near 12 million by mid-2027. That is not a return to pre-war levels. It assumes the dispute between Washington and Tehran continues unresolved while the energy system adapts.

That adaptation matters. Gulf crude exports kept rising through parts of the conflict even as attacks on shipping intensified and insurance costs surged. Producers have rerouted where possible, used pipelines that bypass the strait and accepted higher shipping costs. The market is learning to function around the closure, which is one reason Brent fell from $126.41 at its peak.

But a partial recovery is not enough to justify Brent in the low $90s. With flows still 3 million barrels a day below February levels through the strait itself, and with attacks continuing, global supply remains constrained. The physical shortage shows up in inventories, refining margins and product prices, all of which point to a tighter market than the futures crash implied.

For the forecast, Hormuz flows are the number to watch. Weekly tanker tracking will show whether the post-election diplomacy translates into more barrels. If October’s 11.7 million barrel-a-day pace rises toward 13 million in November, the bearish case strengthens. If it falls back below 10 million, Brent returns to triple digits.

OPEC+ Holds Steady: Quotas It Cannot Physically Reach

OPEC+ is a bystander in this market. The group’s seven core members, Saudi Arabia, Iraq, Kuwait, Oman, Algeria, Russia and Kazakhstan, agreed on November 1 to keep December production targets unchanged at September’s required level, a combined 30.9 million barrels a day. It was the third straight month of unchanged output. The group completed the phased reversal of a 1.65 million barrel-a-day output cut in September, with a final increase of 188,000 barrels a day that month.

The decision is largely symbolic. Gulf members cannot physically produce at their quota levels while Hormuz remains constrained. Most of the seven producers are pumping below their permitted levels. The decision ratifies quotas that the war makes unreachable, which means OPEC+ has very limited power over the physical oil market right now.

The real decision comes later this month. All 21 OPEC+ members will meet on November 29 to set quotas for 2027. That decision depends on a capacity review that was originally scheduled for completion during the fourth quarter but has been complicated by the war, which disrupted projects meant to expand Middle East production. The review is now expected by mid-November.

The 2027 decision is extremely difficult. If the war ends and Gulf exports return, the market could face a significant surplus in 2027. Producers that have been unable to export for months would rush to restore volumes, and OPEC+ would need to cut to prevent a price collapse. If the war continues, quotas stay irrelevant. The group must set a framework that works under both scenarios without knowing which one will happen.

Russia is a complication. As an OPEC+ member that benefits from high prices and is not affected by the Hormuz closure, Russia has every incentive to maximize output while Gulf producers are constrained. That creates tension within the group over how to share the post-war market.

For the forecast, OPEC+ is a downside risk for 2027 and a non-factor for November. The group will not add supply before the war ends. If peace comes, OPEC+ faces a market where its members want to restore volumes faster than demand can absorb them. That is the scenario where Brent falls to the $70s.

U.S. Crude Inventories: A Surprise Draw When the Market Expected a Build

The government’s weekly inventory report contradicted the price crash. U.S. commercial crude inventories fell by 865,000 barrels to 409.8 million in the week ended October 30, according to the Energy Information Administration. Analysts had expected a build of 877,000 barrels. Crude stocks now sit 4% below the five-year average for this time of year. The prior week showed a draw of 1.89 million barrels.

The industry’s own estimate was even tighter. The American Petroleum Institute reported a draw of 5.267 million barrels a day earlier, against expectations for a 2.1 million-barrel increase. That followed a 2.031 million-barrel draw the prior week and a 4.93 million-barrel draw the week before. U.S. crude inventories have now fallen for several straight weeks.

Cushing, Oklahoma, the delivery hub for WTI futures, saw a small build. The EIA reported a 280,000-barrel increase, while the API estimated 511,000 barrels. Cushing stocks are above their seasonal average, which explains some of WTI’s discount to Brent.

The import picture matters. Net U.S. crude imports rose 1.18 million barrels a day in the week, and crude imports ran above average. With imports up and inventories still falling, domestic demand and exports must be running strong. Analysts noted that crude exports appear to have been undercounted by U.S. Customs, and a negative adjustment in unaccounted-for crude points to missing exports. Strong U.S. exports fit the picture of global buyers replacing lost Gulf barrels with American crude.

Total commercial petroleum inventories, which include crude and all refined products, fell by 8.2 million barrels in the week. That is a large draw by any measure and a clear sign the physical market is tight.

The disconnect is stark. A model of fair value based on EIA inventory levels points well above Wednesday’s spot price, and the selloff radically disconnected spot prices from what reported inventories would justify. Futures traders priced a peace deal. Storage tanks show a market still running short.

For the forecast, inventories support a higher price. With crude stocks 4% below average and total petroleum stocks falling 8.2 million barrels in a week, Brent at $94 looked cheap on fundamentals. Thursday’s bounce began to correct that.

Distillates: Diesel Stocks at Their Lowest Since 2003

The refined-products market is where the tightness is most extreme. U.S. distillate inventories, which include diesel and heating oil, fell by 3.6 million barrels to 99.3 million in the week ended October 30. Analysts had expected a draw of just 100,000 barrels. Distillate stocks now sit 13% below the five-year average for this time of year. Distillate inventories have not been this low since 2003.

The Midwest is particularly short. Regional distillate inventories there are especially low heading into the harvest season, when diesel demand from farm equipment peaks, and into winter, when heating oil demand rises. Distillate production fell to an average of 5.2 million barrels a day. Demand ran the other way: the four-week average of distillate supplied hit 4.2 million barrels a day, up 8.7% from a year earlier.

Gasoline is tight but less extreme. Total motor gasoline inventories fell by 222,000 barrels to 209 million, against expectations for a 153,000-barrel build. Gasoline stocks sit 2% below the five-year average. Gasoline production averaged 9.7 million barrels a day. If seasonal patterns hold, next week will mark the final gasoline draw of the year as driving season ends.

Refineries are running hard to keep up. Utilization rose 1.7 percentage points to 94.5% of operable capacity, up from 92.8% the prior week. Refinery crude runs increased 199,000 barrels a day to 16.7 million. Running at 94.5% in November is unusually high, since refiners typically enter maintenance season in the fall. That they are running flat out signals strong margins and strong demand.

Why does this matter for crude prices? Because refiners need crude to make diesel. With distillate stocks at a 23-year low and margins elevated, refiners will keep buying crude at high rates. That supports crude demand regardless of what happens with Hormuz. Products, especially distillates and base oils, remain in short supply.

The Gulf disruption explains much of the distillate squeeze. Middle Eastern refineries export large volumes of diesel and jet fuel, and the Hormuz closure has cut those flows. European and Asian buyers who relied on Gulf diesel are now competing for U.S. and other Atlantic Basin supply.

For the forecast, distillates are the strongest bullish signal in the market. Diesel at a 2003 low into winter makes a Brent price in the low $90s hard to sustain.

Demand: U.S. Oil Consumption Up 4.2% From a Year Ago

Demand is not collapsing. Total products supplied, the government’s proxy for U.S. oil demand, averaged 21.2 million barrels a day over the last four weeks, up 4.2% from the same period a year earlier. Gasoline demand averaged 8.6 million barrels a day over four weeks. Distillate demand ran at 4.2 million barrels a day, up 8.7% from a year ago.

That strength fits the macro picture. The U.S. economy grew at a 3.4% annualized pace in the third quarter. Initial jobless claims fell to 189,000 on Thursday, matching a 57-year low. Productivity rose at a 3.6% annualized rate. An economy with near-record-low layoffs and strong output is an economy that burns more fuel.

Strong demand at high prices is unusual. With Brent averaging well above $100 in October, demand destruction would normally show up in lower consumption. Instead, U.S. demand rose. Part of that reflects the war’s disruption of global trade patterns, as buyers shift toward U.S. supply, but part reflects a resilient domestic economy.

The global picture is more mixed. Europe faces weaker growth, with the euro-area composite purchasing managers’ index falling to 51.7 in October and France’s dropping to 46.6. China’s demand has been uneven. India continues to absorb large volumes. Smartphone and consumer-electronics demand has weakened on memory costs, but that has little direct link to oil consumption.

Equity markets offered a mixed demand signal Thursday. The Nasdaq Composite fell 4.3% into correction and the S&P 500 dropped 3.14%, driven by a collapse in AI and semiconductor stocks. A sustained equity selloff can hurt confidence and spending. But energy was the best-performing S&P 500 sector Thursday, and Chevron was among the Dow’s gainers, a sign investors see the oil selloff as overdone.

The demand side argues against much further downside. Consumption is rising, distillate demand is running well ahead of last year, and the U.S. labor market remains tight. For Brent to sustain levels below $90, the market would need a significant demand shock on top of a supply recovery. Neither is visible in the latest data.

The Strategic Petroleum Reserve: 282.2 Million Barrels and Falling

The U.S. government has been drawing down its emergency stockpile to ease the supply shock. In the week ended October 30, 400,000 barrels left the Strategic Petroleum Reserve to support commercial inventories. That brought total SPR holdings to 282.2 million barrels, a level 432 million barrels below maximum capacity.

The SPR is approaching its operational floor. The generally accepted minimum for the reserve sits between 250 million and 300 million barrels. Below that range, the reserve may have difficulty pumping and processing oil efficiently due to the physical characteristics of the salt caverns where it is stored. At 282.2 million barrels, the SPR is inside that zone.

That limits the government’s ability to cap prices. Earlier in the war, SPR releases helped offset part of the lost Gulf supply and slowed the price rise. With the reserve near its operational minimum, further large releases become harder. If the Hormuz situation worsens, Washington has less ammunition to respond.

The SPR also matters for the post-war market. Once the conflict ends and prices fall, the government will face pressure to refill the reserve. Buying hundreds of millions of barrels over several years would add a steady source of demand, which would support prices in a period when OPEC+ is restoring supply. That creates a floor under the post-war market that did not exist before the drawdown.

The political shift complicates SPR policy. A Democratic Congress controls appropriations, which fund SPR purchases. Refilling the reserve requires budget authority, and the new majority may have different priorities for that spending. That uncertainty adds another layer to the 2027 supply-demand balance.

For the forecast, the depleted SPR is a quiet bullish factor. It removes a policy tool that would normally cap price spikes, and it sets up future government buying that would support prices after the war. The market is not pricing either effect while it focuses on peace headlines.

Macro Crosscurrents: The Fed, the Dollar and the Equity Rout

Oil sits at the center of the macro story. Wednesday’s 8% crash in crude cut the inflation outlook that had been pushing the Federal Reserve toward hikes. September CPI ran at 3.7% year over year and producer prices at 6.3%, with energy feeding directly into both. Cheaper oil lowers that path. That is why Treasury yields fell on Wednesday, with the 10-year down 7.4 basis points to 4.888%.

Thursday’s bounce reversed part of that. As crude recovered 2%, the dollar index edged up to 101.51, and Fed hike expectations held. Markets price a 74.5% chance of a December hike, down from 79.9% a week ago. Cleveland Fed President Beth Hammack and Richmond Fed President Thomas Barkin both backed further tightening on Thursday. Dallas Fed President Lorie Logan said the Fed needs at least two more quarter-point hikes.

The feedback loop matters. Higher oil raises inflation, which pushes the Fed to hike, which strengthens the dollar, which weighs on oil priced in dollars. Lower oil does the reverse. Wednesday’s crash and Thursday’s bounce both ran through that loop.

The Bank of England added to the global tightening picture. It raised rates by a quarter point to 4% on Thursday, its first hike since 2023, and said inflation could reach 5% by mid-2027. Governor Andrew Bailey tied future policy directly to the Middle East, saying that unless the conflict is resolved, Thursday’s hike is unlikely to be the last. The European Central Bank holds at 2.50% after two war-driven hikes, with euro-area inflation at 4.0% and producer prices up 11.1%.

The equity rout cuts both ways. The Nasdaq’s 4.3% drop and the semiconductor index’s 11% collapse signaled risk aversion, which usually hurts oil. But energy stocks held up. The Energy Select Sector SPDR had fallen 4.8% on Wednesday’s crash, and Thursday’s rebound brought buyers back. Gold rose 1.48% to $4,121.74, confirming safe-haven demand.

Friday’s U.S. payrolls report matters for crude through the Fed channel. Consensus sits at 65,000 jobs. A hot print would push the dollar higher and could weigh on crude. A soft print would help. But the direct supply story from Hormuz dominates any macro effect.

Spreads and Regional Prices: Brent’s $7.40 Premium and Canadian Pain

The Brent-WTI spread stood near $7.40 a barrel on Thursday, with Brent at $97.17 and WTI at $89.73. Earlier in the session the spread was measured at $7.22. That premium reflects the war. Brent prices crude delivered in the Atlantic Basin, which competes directly with lost Gulf supply. WTI prices crude at Cushing, Oklahoma, where inventories are above average and supply is local.

A $7 spread is wide by historical standards. Before the war, the Brent-WTI gap typically ran $3 to $5. The wider spread encourages U.S. crude exports, as buyers in Europe and Asia pay a premium for American barrels. That export pull explains part of why U.S. inventories keep falling even as imports rise.

The spread is a useful indicator for the forecast. If Hormuz flows recover and Gulf barrels return to Atlantic Basin markets, the Brent premium should narrow toward $4 to $5. If the spread widens further, it signals that global supply is tightening faster than U.S. supply, which would support higher Brent prices.

Canadian producers are feeling the squeeze. WTI below $90 combined with unusually wide discounts on Western Canadian Select heavy crude puts significant pressure on realized revenues for heavy-oil producers. Canada’s heavy crude typically trades at a discount to WTI to reflect quality and transport costs, and that discount has widened as Gulf heavy-sour barrels disrupted global refining patterns.

The forward curve also matters. During October’s rally, the curve moved into steep backwardation, with near-month contracts trading far above later months. That structure signals a tight current market and an expectation of easing supply over time. Wednesday’s crash flattened some of that backwardation as front-month prices fell faster than deferred months. If the curve steepens again, it would confirm that the physical market remains tight regardless of headline volatility.

Energy equities reflect the price swings. ConocoPhillips and EOG Resources report quarterly results on Thursday, and both will give fresh guidance on how they see the post-war market. Chevron held gains on Thursday as one of the Dow’s best performers.

The Technical Map: $93.22 Floor for Brent, $86.66 for WTI

Brent’s daily chart shows a market that broke hard and is testing support. Wednesday’s intraday low of $93.22 and Thursday’s overnight low of $93.50 form a double bottom near $93. That level marks the lowest Brent has traded since August 31. A daily close below $93 would open a path toward $88 and then the $85 area that held during the summer.

Resistance starts at Thursday’s high of $97.70. Above that, $100 is the psychological line that Brent lost on Wednesday. Tuesday’s close of $103.60 and Monday’s close of $104.77 form the next layer. The $105 area also marks Wednesday’s opening level before the crash. A daily close above $105 would erase the election selloff and target $110, then the October 30 close of $117.64.

WTI’s structure is similar. Thursday’s low at $86.66 is the first floor, near Thursday’s overnight $86.92. Below that, $85 and then $80 come into play. Resistance sits at Thursday’s high of $89.83, then the $90 round number, then Tuesday’s level near $97 and Monday’s near $99.71. WTI’s 52-week high of $117.63 marks the war peak.

Momentum turned deeply oversold. A 19.6% three-day drop pushed Brent’s relative strength index into oversold territory for the first time since the war began. Oversold conditions after a capitulation-style move often lead to sharp rebounds, which is what Thursday delivered.

The volume profile supports a bottom. Wednesday’s 613,910 Brent contracts was the heaviest session in weeks, suggesting forced selling and stop-loss liquidation. Thursday’s 604,740 contracts on the bounce showed buyers stepping in with similar size.

The broader trend is still elevated. Even after the crash, Brent trades roughly 50% above its level a year ago and well above its pre-war range in the $60s. The war premium has been cut but not eliminated. The question is whether $93 marks the bottom of the post-election adjustment or a pause before a deeper slide toward pre-war levels.

Forecast Scenarios: $105 on Stalled Talks, $85 on a Signed Ceasefire

The bullish scenario starts with diplomatic stalemate. If talks between Washington and Tehran fail to produce a ceasefire in the next two weeks, the market will reprice the risk premium it stripped out on Wednesday. Brent would likely recover to $100 quickly and test $105, a 7.6% gain from $97.17. A new attack on Gulf infrastructure or a major tanker incident would push Brent through $110, and risk scenarios put a full escalation in a $110 to $125 range. Tight inventories, a 2003 low in distillates and refineries at 94.5% utilization would amplify any supply shock.

The base case is range trading. With no ceasefire signed but diplomacy ongoing, Brent likely trades between $93 and $105 through the November 29 OPEC+ meeting. That range respects the post-election floor and the pre-election level. WTI would trade between $86 and $97. Weekly inventory reports and tanker-tracking data on Hormuz flows would drive moves within the range.

The bearish scenario needs a real deal. A signed ceasefire with a credible timeline for reopening Hormuz would push Brent toward $85 and WTI toward $78. A full return of Gulf exports to pre-war levels would take Brent into the $70s by early 2027, especially if OPEC+ members rush to restore volumes at the November 29 meeting. The 2027 surplus that analysts have flagged would become the dominant theme.

Probabilities lean bullish from current levels. The market priced a peace deal that does not exist yet. Physical indicators, from crude inventories 4% below average to distillates 13% below average, point to a tighter market than $94 Brent implied. Attacks on shipping continued through election week. And the SPR, at 282.2 million barrels, cannot cushion a new shock the way it did earlier in the war.

The risk-reward favors buying dips toward $93 Brent with a stop below $90 and a first target at $103. A confirmed close above $105 raises the target to $110.

Oil Price Forecast Verdict: Bullish Bias in a $93 to $105 Brent Range, Peace Is Priced Before It Arrives

Oil’s Thursday session was bullish, and the forecast for the next two weeks leans the same way. WTI at $89.73 is up 1.83% and Brent at $97.17 is up 2.69% after a 19.6% three-day crash that took Brent from $117.64 to $94.62. Both benchmarks bounced from their lowest levels since August 31.

The crash was driven by politics, not barrels. Democratic control of Congress and Vice President Vance’s post blaming the war for the midterm loss raised hopes for a deal with Iran. Monday’s Qatar-mediated talks added to them. But no ceasefire has been signed, Iran’s preconditions for reopening Hormuz remain unmet, and four shipping incidents were logged in the strait in the four days before the vote.

The physical market contradicts the futures crash. U.S. crude inventories fell 865,000 barrels to 409.8 million when analysts expected a build, and sit 4% below average. Distillates fell 3.6 million barrels to 99.3 million, 13% below average and the lowest since 2003. Total petroleum stocks dropped 8.2 million barrels in a week. Refiners are running at 94.5% of capacity. U.S. demand is up 4.2% from a year ago. The SPR sits at 282.2 million barrels, near its operational floor.

Hormuz remains the deciding variable. Flows through the strait averaged 11.7 million barrels a day in October, up from 9.8 million in September but below February’s 14.5 million. OPEC+ held December output steady and meets on November 29 to set 2027 quotas, a decision that hinges on whether the war ends.

Base case for the next 10 trading days: bullish bias within a $93 to $105 Brent range and an $86 to $97 WTI range. A daily close above $105 Brent targets $110. A signed ceasefire with a Hormuz timeline would break $93 and target $85. Until diplomacy delivers barrels rather than headlines, the tight physical market keeps the floor firm and the upside open.

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