WTI Swings Around $100 as Middle East Attacks and US-Iran Diplomacy Pull Prices Both Ways; Falls to $94 Low Before Rebound
| Pair | Now | Since publish |
|---|---|---|
| USDCAD | — | — |
- WTI hit a $104.03 five-month high Friday, then slid to a $94 low
- ICE Brent settled 7.6% lower, dropping below $105/bbl on US-Iran talk hopes
- Iran’s Mohsen Rezaei calls US response ‘not convincing’; Hormuz stays closed
- ING sees a sizeable risk premium still embedded; WTI on track for 15% monthly gain
West Texas Intermediate climbed above $100 midweek after the Houthis claimed a ballistic missile strike on Saudi Arabia’s Ras Tanura refinery (550,000 bpd) and the WSJ reported US warnings to Gulf states about possible renewed action against Iran. Prices extended gains on Friday to a five-month high of $104.03, the highest since May, as the UKMTO reported an oil tanker disabled by limpet mine explosions in the Strait of Hormuz. WTI was on track for roughly a 15% monthly gain.
The move reversed on Monday. OPEC+ agreed to hold December output targets steady, and Axios reported that President Trump favored giving diplomacy with Iran more time. Secretary of State Rubio said no decision had been made to resume strikes, and Iran’s president said the Supreme Leader had granted the government certain negotiating powers. WTI fell over 5% to about $96.65 and later touched $94.30, the lowest since 16 October. Brent fell about 3.9% to $109 early in the session.
On Tuesday WTI rebounded to around $95-96. Iran said US-Iran contacts continue through Qatari mediators, but several days of talks produced revised proposals and no major breakthrough. WSJ also reported limited US strikes on Iran’s Qeshm Island, and a senior Iranian official said Tehran’s conditions must be met before Hormuz reopens. TD Securities said diplomacy headlines have trimmed only part of the geopolitical risk premium, given ongoing tanker and Houthi attacks.
ICE Brent settled 7.6% lower in the prior session and fell back below $105/bbl, according to ING strategists Warren Patterson and Ewa Manthey. They attribute the pullback to growing hopes for US-Iran talks ahead of the US midterm elections. ING notes that a sizeable risk premium is still embedded in prices given robust Persian Gulf oil flows, so strong signs of peace progress would imply further downside. Separately, Iranian security official Mohsen Rezaei said America’s response to Iran’s demands was “not convincing” and that the US must fully and explicitly address Iran’s seven conditions before the Strait of Hormuz is reopened. Those conditions are largely the same ones that featured in the 14-point MOU agreed in June. This came as Al-Arabiya carried headlines pointing to positive developments in the talks, similar to those that earlier weighed on oil.