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The Emirates News Agency reported that oil rises after falling to two-month lows as traders reassessed the outlook for the Iran conflict following the US midterm elections. Brent crude futures climbed $3.39 or 3.58 percent to $98.01 a barrel while West Texas Intermediate rose $2.21 or 2.51 percent to $90.33 in the session. This recovery came after the previous day’s plunge of 8.7 percent for Brent to $94.62 its lowest settlement since August 31. The catalyst was the Democratic sweep of both chambers of Congress in Tuesday’s midterm elections which prompted speculation that President Donald Trump would face greater pressure to end the eight-month conflict with Iran.
A Bloomberg report carried by Moneyweb on November 3 showed Brent little changed at $104.77 a barrel after tumbling 7.6 percent the prior day on optimism over US-Iran talks. Iran’s president said his government had been granted more authority by the nation’s supreme leader to negotiate while US President Donald Trump hinted at progress in talks. The plunge came after global benchmark Brent rallied almost 14 percent in October hitting a six-month high on concerns about renewed hostilities. The scope for a diplomatic breakthrough remained unclear in the assessment.
The Guardian reported on November 10 that oil prices have fallen to the lowest level since late August with Brent crude dropping nearly 3 percent to $89.66. The fall came after a near 6 percent drop on Monday on signs that the conflict might be nearing an end. Europe’s benchmark Stoxx 600 index gained 0.9 percent to 662.54 hovering near a record high which it had hit in early August on hopes for a peace deal in the Middle East. Drivers will hope the fall in wholesale oil prices continues to feed through to prices at the pump.
OilPrice.com noted that with prices approaching technically oversold territory Thursday’s recovery may reflect traders reversing some of those positions. The physical oil market has changed considerably as Gulf crude exports have recovered toward pre-war levels albeit at higher transportation costs. National oil companies are aggressively marking down prices for crude as buyers move slowly back into the market according to analysts cited in related coverage.
A WSJ report indicated that oil futures fell to their lowest level since the start of the U.S.-Iran conflict as more oil shipments make it out of the Persian Gulf. Signs are that production and exports will return much faster than had been thought during the war Mizuho’s Robert Yawger says in a note. WTI settled down 3.9 percent at $70.34 a barrel and front-month Brent falls 4.3 percent to $73.74 in that earlier period. The EIA reported a larger-than-expected 6.1 million barrel drop in commercial crude stocks for last week a ninth straight draw.
