On November 5, oil prices fall sharply due to expectations of de-escalation in the war with Iran, but the market is already starting to assume an overly optimistic scenario for the restoration of supplies. Brent $93.65 -1.03% WTI $86.98 -1.29.
Oil fell for the fourth session in a row. The market predicts that the results of the elections to the American Congress will limit Donald Trump's opportunities for further escalation and increase the chances of a diplomatic solution to the conflict with Iran. The market is between two scenarios - another decline, in which negotiations between the US and Iran progress, shipping through Hormuz stabilizes, production and exports recover. And a rebound scenario: negotiations break down, attacks on renewable energy infrastructure, or new supply restrictions appear. The main risk for bears: Commercial oil reserves in major consuming countries remain near 15-year lows. Therefore, even after a sharp decline, the market is exposed to a new supply shock.