Key facts
- Brent crude for November delivery traded at $106.09 per barrel, up 1.70%.
- WTI crude for November delivery traded at $93.29 per barrel, up 0.95%.
- Commodity Trading Advisors (CTAs) are positioned at maximum long across Brent, WTI, and refined product markets.
- Standard Chartered forecasts Brent crude to average $92.00 a barrel in 2026 and $89.50 in 2027.
- US retail diesel prices have crossed $6.50 per gallon, up 83% year to date.
- European natural gas rebounded to €74.26/MWh on Monday.
Oil prices rebounded from recent declines on Monday, with Brent crude for November delivery rising 1.70% to $106.09 per barrel and WTI crude for November delivery up 0.95% to $93.29 per barrel. The gains came amid mixed diplomatic signals between the U.S. and Iran, with leaders on both sides issuing threats. Iranian President Masoud Pezeshkian blamed the U.S. for global instability and vowed to never bend the knee, while setting preconditions for dialogue. U.S. President Donald Trump reiterated his stance on potentially 'annihilating' Iran but also suggested a possible deal post-midterms. An adviser to Iran’s supreme leader warned of war expansion to the Indian Ocean if attacked.
However, Standard Chartered experts noted that the current oil price rally is constrained by ultra-bullish positioning from money managers, particularly Commodity Trading Advisors (CTAs). These trend-following funds have reached maximum long positions across Brent, WTI, and refined product markets, a level rarely seen in the past decade. Further gains, they stated, depend on discretionary or physical buyers, not just momentum trading. The risk of consolidation or sharp liquidation exists if flows through the Strait of Hormuz normalize or Saudi exports recover further.
Standard Chartered sees risk in two directions: a drop from CTA position unwinding, or a rise requiring a new physical shock like infrastructure damage or sustained disruption to Strait of Hormuz flows. The firm's longer-term forecast still points to higher prices for crude and refined products, contingent on geopolitical resolution speed and credibility.
US retail diesel prices have surged past $6.50 per gallon, an 83% year-to-date increase, with gasoline nearing $4.50 per gallon. Trump has linked price spikes to disruptions in Russia's refining system, which Standard Chartered estimates would take months to restore. European natural gas also rebounded to €74.26/MWh, with uncertainty over the Middle East resolution persisting, though mild weather forecasts are expected to ease heating demand.