Oil flat Friday at $98.32 Brent — but the week was the worst since COVID
Oil ended Friday essentially flat — Brent $98.32, WTI $90.83 — but the week was brutal: Brent fell 13.3%, the steepest weekly drop since the start of COVID, as hopes of a US–Iran de-escalation pulled the war premium out of crude.
The News
Oil ended Friday essentially flat after Thursday’s rebound. Brent for January settled at $98.32, up just $0.03, and WTI for December settled at $90.83, up $0.31. Brent had climbed back above $100 during the day, peaking near $100.30, before fading into the close. The flat finish hides the real story, which is the week: Brent fell 13.3% from the October 30 futures close of $113.40, and WTI fell 11.8% from $102.95 — the steepest weekly percentage fall since the start of COVID, according to Investrade.
The week’s driver was hope, not supply. Investors bet that the Democrats’ midterm sweep hastens an end to the US–Israeli war with Iran, and that pulled the war premium — the extra price traders pay for the risk that supply gets cut off — out of crude. That happened even as tankers kept being hit in the Gulf — Reuters reported three more damaged in the Strait of Hormuz on Thursday. The oil majors were flat too: ExxonMobil closed at $165.87, up 0.34%, and Chevron at $212.61, down 0.15%. Note the arithmetic: Brent’s $0.03 Friday gain is noise against a roughly $15 weekly fall from the October 30 close of $113.40.
This is a new event — the November 6 settlement — not a repeat of the November 5 rebound settlements of $98.29 and $90.52 published yesterday. Next week’s frame is already set: US inflation data (CPI) arrives Tuesday, November 10, and OPEC’s monthly report follows on Wednesday, November 11.
Oil prices ended the day up slightly, but down big on the week!
Why It Matters
A 13.3% weekly fall is the kind of move that resets expectations. Oil had been priced for a war that disrupts supply; the market is now pricing a war that ends. But the flat Friday, after a $3.67 Thursday rebound, shows the market is not sure: Brent touched $100 intraday and could not hold it, which is what a market looks like when two forces — diplomacy pulling prices down, tanker attacks pulling them up — are evenly matched.
It matters for the majors because their shares are now moving with the diplomacy headlines, not with their own results. ExxonMobil and Chevron were essentially flat on a day oil was flat, and their third-quarter earnings are already weeks old. Until OPEC’s report on Wednesday or the next tanker incident breaks the tie, the majors are passengers on the Iran story.
Friday’s flat finish came after Thursday’s sharp rebound — Brent up $3.67, or 3.9%, and WTI up $2.40, or 2.7% — so the market has now moved sharply down, up 4%, and flat in three sessions. That is not a market with a view; it is a market waiting. The next scheduled chances to form one are Tuesday’s US inflation reading and Wednesday’s OPEC monthly report, but neither is about the Gulf. The unscheduled chance — the next tanker report — is the one that has moved prices all week, and it arrives without a timetable.
Analyst's Take
Our call is Mixed, because the signals genuinely point both ways. The weekly numbers argue for lower prices — a 13.3% fall is a market repricing a war premium away, and diplomacy hopes are a real force. But the daily numbers argue the other way: oil bounced 3.9% on Thursday, touched $100 on Friday, and Reuters reported tankers were still being hit — three more damaged in the Strait of Hormuz on Thursday. A market that falls 13% in a week and then cannot decide its direction is a market waiting for news.
The honest read is that neither side has won yet. If Qatar's two-stage plan — a US blockade lift and IAEA inspections on day one, the Strait of Hormuz reopened on day two, as Axios reported it — or Iran's nuclear proposal sent through Qatar, which Reuters reported, produces a real answer, the war premium comes out and Brent tests lower. If another tanker is hit, the premium goes straight back in. Watch Tuesday’s CPI and Wednesday’s OPEC report — but watch the Strait of Hormuz first.
Are you bullish or bearish on this story?
By The Numbers
FAQ
What is Brent, and what is WTI, in plain terms?
They are the two main prices for crude oil. Brent is the global benchmark, priced off North Sea oil; WTI — West Texas Intermediate — is the US benchmark. When people say “oil rose,” they usually mean one of these two settled prices.
What is a “war premium”?
The extra amount traders pay for oil because of the risk that a war cuts off supply. When peace looks more likely, the premium shrinks and prices fall — even if no extra oil has actually been produced.
What does “steepest weekly fall since COVID” mean?
Brent’s 13.3% weekly drop is the biggest percentage fall in a single week since the early-2020 pandemic crash, when demand collapsed.
What is OPEC’s monthly report, and why watch it?
OPEC, the group of oil-producing countries, publishes a monthly outlook on supply and demand. The next one lands Wednesday, November 11, and it is the first official read on whether producers plan to change output.
What is CPI, and why does it matter for oil?
CPI is the consumer price index, the main measure of US inflation, due Tuesday, November 10. Hot inflation can push interest rates up and the dollar with them, which usually weighs on oil prices.
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Source: Investrade / CNBC