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WAM reported that oil prices edged lower after one-week high on Friday following volatile trading in which benchmarks had climbed as much as 5 percent earlier in the week. Brent crude futures fell 87 cents, or 0.82 percent, to settle at $105.73 a barrel while West Texas Intermediate dropped $1.56, or 1.65 percent, to $93.05 a barrel. The decline reversed part of the prior session’s gains, when Brent rose 3.4 percent and WTI advanced 2.7 percent to mark their highest closes since mid-September. A Houthi missile attack on Saudi Arabia had revived supply concerns, prompting the earlier rally before diplomatic developments took center stage.
According to a Reuters dispatch, negotiators in New York were discussing the reopening of the Strait of Hormuz as part of truce talks between the United States and Iran. The spread between Brent and WTI widened to $12.68 a barrel, the largest gap since May, as fears of a potential U.S. ban on diesel exports weighed more heavily on the American benchmark. Markets remained wary of further disruptions, with the latest attack underscoring vulnerabilities in regional oil facilities despite the ceasefire that took hold in June.
U.S. Energy Information Administration figures show global oil inventories have fallen by an estimated 400 million barrels so far in 2026, contributing to sustained price support even as recent builds appeared in domestic stocks. The EIA’s September outlook projects Brent to average around $90 per barrel in the second half of the year before easing to $74 in 2027 as Middle East exports normalize and production restarts. Inventories are forecast to continue drawing at an average rate of 1.7 million barrels per day in the fourth quarter.
EIA weekly data released earlier in the week placed the commercial crude inventory build at 2.97 million barrels for the period ended September 18, exceeding analyst expectations for a draw. Stocks at the Cushing delivery hub rose by 2.27 million barrels while gasoline inventories fell 1.7 million barrels and distillates declined by 428,000 barrels. Refinery runs dropped 519,000 barrels per day, pushing utilization down 2.8 percentage points to 94 percent.
BusinessStats Research compilations indicate that Brent prices had surged near $120 per barrel in March and April during the height of the 2026 Iran conflict when the Strait of Hormuz was closed, disrupting roughly 20 percent of global supply. A June ceasefire helped bring the benchmark back to around $78 before recent attacks and supply worries lifted it above $100 again. U.S. crude production has reached record levels near 13.5 million barrels per day, adding further potential downward pressure once Gulf flows stabilize.
A Mordor Intelligence sector assessment and related EIA projections point to ongoing volatility in the oil market as OPEC+ implements phased quota increases while geopolitical risks linger. The agency expects global liquid fuels production to reach 100.6 million barrels per day in 2026 before rising further in 2027. These dynamics continue to shape trading patterns across benchmarks, with participants closely monitoring developments in both diplomacy and inventory trends.
