WTI Closes at $102 Amid Hormuz Risks and Focus on Trump Decision
Key Facts
West Texas Intermediate closed at $102 a barrel on October 29, according to EL7 data, after the December contract settled at $102.78 in the previous session, up 2.9%, according to Bloomberg as reported by Rigzone. Trading was shaped by security risks in the Strait of Hormuz and attention to Washington’s stance toward Iran, alongside signs of a possible de-escalation. On October 28, an Associated Press report said President Donald Trump had not made a final decision on new strikes against Iran. The report added that he had reiterated he was weighing military action after the U.S. elections scheduled for November 3. The possibility of escalation therefore remained in market pricing, although no final U.S. decision had been issued.
The October 29 moves reflected a balance between supply risks and signs of easing tensions. Brent fell 44 cents, or 0.38%, to $114.88 a barrel at settlement, according to Reuters via Euronext. Both crude benchmarks fell by more than $2 a barrel earlier in the session before paring their losses; the move followed gains in the previous session of 1.3% for Brent and 3% for WTI. Reuters attributed the volatility to traders weighing hopes for negotiations against the risk of supply disruptions. A U.S. official said, according to Axios on October 29, that the United States and Iran were "very close" to a de-escalation deal. Iranian officials, meanwhile, continued to demand the lifting of the blockade, the release of frozen funds and permission for Iran to sell oil before nuclear negotiations resume.
The Strait of Hormuz remained a focal point for immediate risks to tanker traffic. Iran said on October 29 that 3 oil tankers had been struck by mines while trying to exit the strait via an unauthorized route, according to the Associated Press, which said it was unable to verify the account. Iran’s account said the tankers had caught fire during the preceding 24 hours. In its October report, the U.S. Energy Information Administration said higher tanker rates in September reflected increased insurance costs. It said ships were taking longer routes to avoid conflict zones, reducing the number of vessels available. More than 1.5 billion barrels of crude have passed through the strait with U.S. assistance since the summer, according to U.S. Central Command, Bloomberg reported via Energy Connects.
Despite the threats, Bloomberg coverage on October 26 estimated that crude shipments from the Middle East had returned to levels close to those before the war, including shipments through Hormuz, despite Iranian attacks on vessels. The return put flow estimates in direct tension with shipping risks and costs. An analyst at Rystad Energy said the market was pricing in some escalation risk after the midterm elections. The analyst added that those risks could keep prices elevated even as flows improve. In its October report, the Energy Information Administration projected that most regional production would return to its pre-conflict average by the end of the second quarter of 2027. It estimated average Brent at $87 a barrel in the second quarter of 2027 and $74 in the fourth quarter of the same year.
On U.S. supply, crude inventories fell by 1.9 million barrels to 410.6 million barrels in the week ended October 23, according to the Energy Information Administration in data reported by Reuters. The result was contrary to analysts’ expectations for an increase of 15,000 barrels. New orders for manufactured durable goods in the United States rose 1.8% in September to $345.4 billion, after increasing 0.1% in August, according to the U.S. Census Bureau. Transportation equipment led the increase, with orders rising by $5.2 billion. Inventory and orders data provide economic context separate from the security developments affecting oil trading, and the sources do not attribute the price moves to them. The next U.S. oil inventory report is scheduled for November 4, while the report on October advance durable-goods orders is due on November 25.