Oil between oversupply and shortage of supply.
Brent $95, WTI $88.
U.S. crude oil inventories increased by 4.7 million barrels in the week ended Nov. 6, to 414.4 million. Commercial petroleum product inventories added 11.4 million barrels. At first glance, the market receives a signal of excess supply. But US oil inventories are still 4% below the five-year average and distillate inventories are 8% below the five-year average.
At the same time, supplies from the Persian Gulf are being restored, many analysts report, although tankers continue to be attacked.
Middle Eastern oil is sold at a discount, while Russian oil is more expensive in some directions.
India is increasing its purchases from the Persian Gulf, while China maintains significant demand for Russian raw materials. The competition for buyers is increasing.
In the physical oil market, after a recent decline, spot prices rose again. This does not rule out talk of oversupply: there may be enough oil on the global balance sheet, but the availability of specific grades and the reliability of supply remain in question.
Global trigger - Hormuz.
It is likely that the United States will not agree to all of Tehran's terms, and Iran is not going to simply give up its nuclear claims. It is not known how long the conflict will last. But relying on a quick return to normal delivery is still risky.
Witkoff and Kushner flew in from Moscow, and the sides exchanged public diplomatic language. It is unlikely that we will find out what was agreed behind closed doors in the near future.
But there is a feeling that the diplomatic lull may not last long. The negotiators flew away - drones may arrive again soon.
Attacks on refineries, oil terminals and ports may resume or increase.