Midweek Oil Wrap: Brent Tops $90 A Barrel After Pulling Back Briefly, OPEC October Oil Output, Strategic Petroleum Reserve And More

Brent crude futures rose above $90 a barrel and were trading at $92.36 a barrel at the time of writing after briefly falling to two-month lows earlier this week.

• In a post on Truth Social, President Donald Trump said he had an “excellent conversation” with the Prime Minister of Qatar on Monday, which included discussions about Iran.
• Meanwhile, according to Reuters data, 37 ships were attacked in the Strait of Hormuz and ​surrounding shipping routes in October. 
• Data from the American Petroleum Institute noted that U.S. oil inventories shrank 9.8 million barrels in the week of Nov. 6, much more than anticipated. 

Global oil prices edged back higher early on Wednesday in Asian markets after briefly falling to two-month lows as the market eyes developments in the war between the U.S. and Iran, and ongoing attacks on commercial shipping in the Strait of Hormuz.

Brent crude futures rose above $90 a barrel and were trading at $92.36 a barrel, up about 1%, while WTI crude futures traded 0.59% higher at $86.55 per barrel.

Brett Erickson, Managing Principal, Obsidian Risk Advisors, said in a post on X that oil seems significantly undersold at current levels. 

Mixed Signals On Iran War

On Monday, President Trump met with Qatar's prime minister, Sheik Mohammed bin Abdulrahman, in a closed-door meeting at the White House. 

In a post on Truth Social, Trump said that he had an “excellent conversation” with the Prime Minister of Qatar, which included discussions about Iran. He added that the Middle Eastern countries Qatar, Saudi Arabia, UAE, Bahrain, Kuwait, and others have agreed to a “continuation of the Greatest Naval Blockade in History, and the new Operation Iron Gate — Therefore, Land and Sea. All have agreed that Iran cannot have a Nuclear Weapon — That is non-negotiable!”

“Should there be any change with respect to developments in the Middle East, the United States of America is “locked and loaded” and ready to go. At this point, however, that seems to be quite unlikely. Israel and the entire Middle East are protected from Iranian danger and threats. We are seeing positive momentum toward an end to this Conflict, and will ensure that America’s interests are at all times protected. At the conclusion of this Military Engagement, the American People, and the World, will be far safer and more secure,” he added.

However, Iranian Parliament Speaker Mohammad Bagher Ghalibaf accused Israel of trying to drag the U.S. into an “endless war” with Iran, while security chief Mohsen Rezaei dismissed reports of ongoing negotiations between Tehran and Washington.

Erickson noted in the social media post from Tuesday that “In the lead-up to the Israeli elections and U.S. midterms, oil saw a significant fear premium priced in that saw it reach upwards of $118/barrel. That was artificially high. But now oil is artificially low on the false belief that the US/Iran War is effectively out of the woods now. It’s not.”

Attacks In The Strait Of Hormuz Continue

Meanwhile, according to Reuters, new data has implied that 37 ships were attacked in the critical waterways and ​surrounding shipping routes in October, the highest monthly total since the start of the war. 

Another 10 attacks ⁠have been recorded so far in November.

"Even in the event a deal is struck, an increase ‌in ⁠flows through the waterway would still depend on mine clearance, insurance costs and whether or not shipowners would even be willing to take the risk," LSEG analysts said in a Nov. 10 note, as per Reuters, adding that “attacks have not slowed."

OPEC Output Rises In October

Meanwhile, oil output from the Organization of the Petroleum Exporting Countries (OPEC) rose in October, as per a Reuters survey. The gains were led by increased output in Saudi Arabia, Kuwait and ​Iraq. 

OPEC’s crude output rose by 1.38 million barrels per day month-on-month to 22.87 million bpd, according to the report. October's output rate is 90% of ​the output produced in February, the last month before ​the Iran conflict. 

Oil Inventories Are Shrinking

Meanwhile, data from the American Petroleum Institute noted that U.S. oil inventories shrank 9.8 million barrels in the week of Nov. 6, much more than anticipated. 

Meanwhile, the U.S. Energy Information Administration (EIA) forecasts that the government's Strategic Petroleum Reserve will reach new lows in the coming months due to additional Iran- and hurricane-related withdrawals. 

The EIA's new short-term energy outlook predicts that the country’s energy backstop will come in at a little over 240 million barrels in the early half of next year. 

However, these levels are expected to rebound by the end of 2027, with new deposits likely to push reserves up to 344.7 million barrels by the end of next year. 

Retail Stance On Oil 

On Stocktwits, retail sentiment around the United States Oil Fund (USO) was ‘extremely bearish’ at the time of writing, while it was ‘bearish’ for ProShares Ultra Bloomberg Crude Oil (UCO). 

One user said, “$USO Hmmm, there is no deal, there will be no deal, we trade on war risk premium, transit is back to close to pre-war levels, tankers are getting bombed often, there is no oil glut no matter what some ,,analysts" say, and even after all off that this chart is not convincing. We'll see how this plays out this week, but I'm still bullish.”

USO has more than doubled so far in 2026, while UCO has gained 160% amid the Iran war. Meanwhile, the State Street Energy Select Sector SPDR ETF (XLE) has rallied nearly 42% year-to-date. 

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