Crude oil prices dropped to less than $92 per barrel for Brent and $86 for WTI following reports citing President Trump as not planning to attack Iran “at this point”.
At the time of writing, Brent crude was trading at $91.61 per barrel, and West Texas Intermediate was at $85.81 per barrel, after crashing by 7% on Monday, as reports emerged that the United States was open to letting Iran enrich uranium to almost 4% and Iran was, reportedly, going to accept the suggestion. The reports have not been confirmed by official sources from either side.
Meanwhile, however, the Houthis continue to target Saudi energy infrastructure, with the latest attack once again on the East-West pipeline. According to an official from the Saudi energy ministry, the attack caused a “limited fire”, which was extinguished.
Tanker attacks in the Strait of Hormuz also continued this week, but oil traders dismissed these, apparently focusing on the reportedly good news about that war. “While attacks on shipping around the Strait of Hormuz are still occurring, they have not escalated in a way that has forced a fresh risk premium into the market,” KCM Trade’s chief market analyst Tim Waterer said, as quoted by Reuters.
The publication noted in a report from earlier today that Brent crude has shed 22% from its latest high, $118 per barrel, reached at the end of October, which was the most Brent crude had cost in six months.
In further bearish news for oil, a Reuters survey found OPEC production in October had added 1.38 million barrels daily, for a total of 22.87 million barrels daily. That’s still down from the February average of 25.48 million barrels daily, but the gap seems to be closing.
OPEC+ had pledged earlier in the year to boost output, but the Iran war made it impossible for the group to deliver on that pledge. The members covered by the group’s quota deal pumped about 25 million bpd in August, against a combined target of 31.01 million bpd, and the group held quotas steady for October and November
By Irina Slav for Oilprice.com
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