Key facts
- Brent's November 4 settlement of $94.62 was its lowest since August 31, after an $8.98 drop.
- WTI closed at $88.12 on November 4, down $7.97, also the lowest settlement since August 31.
- Eurasia Group put the probability of a negotiated agreement at 10%, down from 20%, and renewed U.S. strikes at 60%.
- Reuters reported at least five vessel incidents in the Persian Gulf since November 1.
- Iran is reviewing proposals delivered through regional mediators, with Washington and Tehran still divided on terms.
- Gulf crude exports have recovered toward pre-war levels at higher transportation costs, the report said.
Oil prices rose on November 5, with Brent crude climbing to $98.01 a barrel by early afternoon, up $3.39 or 3.58%, and West Texas Intermediate rising $2.21 or 2.51% to $90.33. Both benchmarks continued climbing later in the session.
The rebound followed a selloff on November 4, when Brent fell $8.98, or 8.7%, to settle at $94.62 and WTI dropped $7.97, or 8.3%, to close at $88.12. Both were the lowest settlements since August 31. The trigger was the Democratic sweep of both chambers of Congress in the November 3 midterm elections, which prompted speculation that President Donald Trump would face greater pressure to end the eight-month conflict with Iran. Brent had fallen roughly 18% over the week as traders shed positions on expectations of a diplomatic settlement.
By November 5, the prospects for a quick resolution appeared less certain. Eurasia Group lowered its estimated probability of a negotiated agreement to 10% from 20% and put the likelihood of renewed U.S. strikes at 60%. Iran is reviewing proposals delivered through regional mediators, though Washington and Tehran remain divided over the conditions for an agreement.
Shipping risks persist. Reuters reported at least five vessel incidents in the Persian Gulf since November 1, with threats to commercial traffic continuing despite a recovery in crude shipments through the Strait of Hormuz. Gulf crude exports have recovered toward pre-war levels, albeit at higher transportation costs, the report said.
Market participants cited by Bloomberg attributed the scale of the November 4 decline to heavy liquidation in crude futures, and the November 5 recovery may reflect traders reversing some of those positions as prices approached technically oversold territory, the report said.