Oil rebounds as Iran rules out talks with Washington
Brent rose $1.27 to settle at $92.76 a barrel on Wednesday and WTI gained 49 cents to $86.53, rebounding from two-month lows after Iran's top security official said no talks with Washington are under way and Tehran would not allow enriched nuclear material to leave.
📊 Scorecard: our Bullish call on $XOM is scored from $166.71, the last close before it ran. Its first result comes after the next close.
The News
Brent futures rose $1.27, or 1.39%, to settle at $92.76 a barrel on Wednesday, November 11, and WTI gained 49 cents, or 0.57%, to $86.53 — rebounding from two-month lows after Iran's top security official, Mohsen Rezaei, said no talks with Washington are under way and Tehran would not allow enriched nuclear material to leave the country. Brent had been up nearly 3% at $93.90 late in the morning in New York, and heating oil futures gained 4.1%.
The move is a reversal of the month's story so far. Oil had slid about 21% for Brent and 17% for WTI since the start of November, on bets that the US–Iran war was ending and the risk of a supply disruption was fading. Rezaei's comments cut against that bet: if there are no talks and no deal on enriched uranium, the standoff continues, and the market priced some of the risk back in. The US, for its part, said the nuclear issue must be part of any preliminary negotiations.
The data picture is incomplete. Official US inventory figures — the weekly count of how much oil and fuel the country holds — were delayed a day by the Veterans Day holiday and are due Thursday, November 12. That report will show whether US stockpiles are tightening or building, and it lands a day after the market has already moved on the Iran news. Wednesday's rebound is about geopolitics, not supply numbers — those come tomorrow.
One official's comments undid a month of peace bets in a morning.
Why It Matters
The rebound matters because it shows how much of November's oil slide was built on a single assumption: that the US–Iran standoff was ending. When one official's comments challenged that assumption, Brent jumped nearly 3% in a morning. Oil at $92.76 is still a war-risk price — it is just a smaller war-risk price than the market had assumed a day earlier. The speed of the move says the market was positioned for peace, not for a stalemate.
The scale of the month's fall is the context that keeps this in proportion. Brent is down about 21% since November began, and a $1.27 rise recovers only a fraction of that. WTI's 49-cent gain is smaller still, at 0.57%. This is a bounce inside a slide, not a reversal of it — unless the talks stay off and the inventory data due Thursday shows stockpiles tightening, in which case the floor may be in.
For the majors, the read-through is straightforward. Exxon and Chevron earn more when crude prices rise, and a $92.76 Brent is a profitable price for both. But a price driven by a standoff is a volatile price: it can fall as fast as it rose if talks resume, and it can spike if the Strait of Hormuz — where tankers have been attacked this month — sees another incident. The oil trade right now is a news trade, and the news changes daily.
Analyst's Take
Our call is Bullish. Brent at $92.76 with the talks off, heating oil up 4.1% and a two-month low behind it says the market has stopped pricing in a quick end to the standoff — and the inventory data due Thursday could add a second leg if stockpiles look tight. The $93.90 intraday high shows buyers were willing to chase the move.
What to watch: Thursday's official US inventory data, and any further word from Washington or Tehran on whether talks are truly off the table. If inventories draw down and the standoff holds, Brent has room to retrace more of the month's slide. If talks resume, the $1.27 gain unwinds just as fast.
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By The Numbers
FAQ
Why did oil rise?
Iran's top security official, Mohsen Rezaei, said no talks with Washington are under way and Tehran would not allow enriched nuclear material to leave the country. That pushed back against bets that the US–Iran standoff was ending, and oil rebounded from two-month lows.
How much did prices move?
Brent rose $1.27, or 1.39%, to settle at $92.76 a barrel, and WTI gained 49 cents, or 0.57%, to $86.53. Brent had been up nearly 3% at $93.90 late in the morning in New York, and heating oil futures gained 4.1%.
What is Brent and what is WTI?
Brent and WTI are the two main benchmarks — standard prices — for crude oil. Brent is the global benchmark, priced off North Sea oil; WTI, West Texas Intermediate, is the US benchmark. Most of the world's oil is priced off one of the two.
How far had oil fallen?
The rebound reverses part of a slide that took Brent down about 21% and WTI about 17% since the start of November, on bets that the US–Iran war was ending. Even after Wednesday's rise, both are well below where November began.
What comes next?
Official US inventory data was delayed a day by the Veterans Day holiday and is due Thursday, November 12. The US has also said the nuclear issue must be part of any preliminary negotiations with Iran.
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Source: Reuters via Stockbiz