Brent settles at $113.88 after Gulf attacks, up 4.7% on the week
December WTI ended at $99.90 as Gulf attacks and talks involving Iran pulled prices in opposite directions, while U.S. crude stocks fell 3.06 million barrels.
- Brent settled at $113.88 on Oct. 27, up 4.7% from Oct. 20 by our calculation, as Gulf attacks continued.
- U.S. commercial crude stocks fell 3.06 million barrels to 412.5 million in the week to Oct. 16, according to the EIA.
- Seven OPEC+ countries meet on Nov. 1, and U.S. midterm elections follow on Nov. 3, two dated items for the market.
Brent futures settled at $113.88 a barrel on Oct. 27, up 4.7% from Oct. 20, in the week of Oct. 21-27, as Gulf attacks kept supply fears alive, according to a Reuters report on Oct. 27.
Brent topped $117 on tanker attacks, then fell on talks
Brent surged to more than $117 a barrel in the days before Oct. 27 after Iranian attacks on tankers around the Strait of Hormuz, according to Reuters.
Brent then settled at $113.88, down $1.93 on the day, well below that peak, which was its highest since April.
The slide began a day earlier. Brent settled at $115.81 on Oct. 26, down 91 cents, as hopes of easing hostilities weighed, according to Business Recorder's Reuters copy.
Iran held talks with Saudi Arabia, Turkey and Pakistan, and the four countries agreed to keep talking, according to Iranian state media cited by Reuters on Oct. 27.
The Houthis said they hit Saudi Arabia's Ras Tanura refinery with a ballistic missile on Oct. 27. Reuters reported no independent confirmation of the strike or of any damage.
Attacks on ships in October reach the highest total on record
The Washington Institute for Near East Policy counted 28 confirmed or reported attacks in the Strait of Hormuz and nearby waters in October, and 113 since the war began on Feb. 28, according to Reuters on Oct. 23.
The International Maritime Organization listed 120 incidents since the conflict began, a count Reuters said broadly aligns with the institute's. A Reuters review found more than 30 very large crude carriers damaged, 11 of them in October.
That is about 3.5% of a global fleet above 900 such vessels. The data supports the view that physical risk, not inventories alone, drove the price spike.
In an Oct. 19 note, Kpler reported at least 18 vessels attacked over two weeks, according to The Nation on Oct. 21.
U.S. crude stocks fell 3.06 million barrels and the reserve slipped to 282.7 million
U.S. commercial crude stocks fell to 412.5 million barrels in the week to Oct. 16, down 3.06 million, according to the EIA weekly stocks table. The agency published the figures on Oct. 21.
Gasoline stocks fell 2.95 million barrels to 205.3 million, and distillate stocks rose 1.68 million to 104.3 million, according to Reuters on the EIA data. Analysts had expected a crude draw of 820,000 barrels.
The Strategic Petroleum Reserve held 282.7 million barrels, down 0.3 million, in EIA data for the same week. The Energy Department asked for offers on Oct. 16 to exchange up to 17 million barrels, according to Reuters via BOE Report.
Energy Secretary Chris Wright said in an Energy Department release on Sept. 29 that several European members had released only a small share of their pledged supplies.
"We urge every member country to fulfill its commitments," Wright said.
The exchanges draw barrels from the reserve now and return them with premium barrels later, so the reserve level reflects loans rather than sales.
The WTI roll left December as the front month after November expired at $101.79
The November WTI contract expired on Oct. 20 and settled at $101.79, down $1.87. December WTI settled at $97.82 that day, according to the Saudi Press Agency. Brent settled at $108.79.
December WTI then ended Oct. 27 at $99.90, 2.1% higher than on Oct. 20. The Brent-WTI spread widened to $13.98 from $10.97, our calculation from the same settlements.
UBS expects Brent near $110 through year-end, raised from $100 a barrel, according to the Reuters report on Oct. 27. Brent settled at $113.88 that day, above that level.
The week in numbers
| Benchmark | Close | Week change | Source |
|---|---|---|---|
| Brent (December futures) | $113.88 | +4.7% | Reuters via Yahoo Finance |
| WTI (December futures) | $99.90 | +2.1% | Reuters via Yahoo Finance |
| Brent-WTI spread | $13.98 | +$3.01 | Our calculation |
| U.S. commercial crude stocks | 412.5 million barrels | -3.06 million barrels | EIA weekly stocks table |
| Strategic Petroleum Reserve | 282.7 million barrels | -0.3 million barrels | EIA weekly stocks table |
As of Oct. 27 for futures and the week to Oct. 16 for EIA stocks. Week changes for Brent, WTI and the spread are our calculation from the settlements on Oct. 20 and Oct. 27.
Three dated items between Nov. 1 and Nov. 4 can move supply and demand
- Nov. 1: the seven OPEC+ countries meet again. They kept November output at September levels on Oct. 4, according to OPEC's statement.
- Nov. 3: U.S. midterm elections, which Energy News Beat tied on Oct. 27 to consumer fuel prices and the Iran decision.
- Nov. 4: the EIA publishes its weekly report for the week to Oct. 30, due at 10:30 a.m. ET under the standard Wednesday timing on the EIA release schedule.
Brent and WTI figures are futures settlements. WTI changes compare December contracts on both dates because the November contract expired on Oct. 20.