Brent rises 45 cents to $93.21 as supply and tensions balance risks
Key Facts
Brent crude futures rose 45 cents, or 0.49%, to $93.21 a barrel by 0732 GMT on Thursday, November 12, after both crude benchmarks fell more than a dollar a barrel in early Asian trading, Reuters reported. The recovery during the session came as investors continued to weigh the return of Middle East oil production against geopolitical risks linked to the confrontation between the United States and Iran. The two-way move over the same hours meant supply weighed on crude, while risks limited the extent of the decline. Saxo Bank analyst Ole Hansen said the current situation was "no war and no peace," allowing oil production in the region to recover despite a stalemate in negotiations between Washington and Tehran. By 0946 GMT, Brent had fallen 37 cents, or 0.4%, to $92.39 a barrel, despite both crude benchmarks recovering from earlier losses, and they were on track for a weekly decline, according to Reuters.
In remarks reported by Reuters, Iranian security official Mohsen Rezaei said Iran would not allow "even a single particle" of enriched nuclear material to leave the country. He added that the United States would face consequences if it launched new strikes, a conditional warning linking potential escalation to security risks that could affect energy-market calculations. Reuters did not report in its account of the oil session that Iran threatened to target U.S. bases in Europe and the Middle East. The warning coincided with the continued stalemate in U.S.-Iran negotiations, which Hansen described as a "no war and no peace" situation. In the analyst's view, the stalemate does not prevent production from recovering, but keeps geopolitical risks present in the market.
Crude is under pressure from the return of Middle East production after earlier disruptions, Reuters reported, while ongoing geopolitical risks are likely to limit further declines. Hansen said the stalemate between Washington and Tehran allows the region to restore its output, adding supply to the market despite unresolved political differences. Against this supply backdrop, OPEC+ crude production rose in October, driven by higher Saudi output, despite continued shipping disruptions through the Strait of Hormuz. This brings together two opposing factors: higher production weighs on prices, while shipping disruptions and political risks limit the prospect of the risk premium easing. Reuters therefore described the return of production as a source of pressure on crude prices, with risks remaining a factor limiting the decline.
In the United States, crude inventories rose by 9 million barrels in the latest week, according to a market-source estimate based on American Petroleum Institute data, Reuters reported. That figure remains an estimate from market sources, not a reading from the Energy Information Administration's official weekly report. The agency's report for the week ended November 6 was scheduled for release on Thursday, November 12, at 12 p.m. Eastern time, after the federal government closed on Wednesday, November 11. The agency also scheduled the report's publication for 2 p.m. Eastern time, according to its weekly schedule. The inventory figure is part of the broader supply picture, but does not erase the effect of developments in Middle East production or geopolitical risks on price movements.
Energy Information Administration data show that the average spot price of Brent was $124 a barrel in October, up $10 from September and the highest level since July 2022 after adjusting for inflation. The agency also estimated that Middle East oil production outages averaged 2.5 million barrels per day in October, down from a peak of 10.9 million barrels per day in May. The agency said the level of outages is expected to remain nearly unchanged through the end of 2026. On inventories, U.S. commercial crude stocks fell to 410 million barrels at the end of October, the lowest end-of-month level since 2014. These indicators put November's session moves in the context of a market that saw elevated spot prices in October, production outages receding from their peak, and U.S. inventories at a low level compared with previous end-October readings.