On October 8, 2023, the global oil market witnessed new trades for Brent oil, which reached a price of $103.16 per barrel on the last day of the November contract. This price marked an increase of 57 cents, or 0.6 percent, compared to the previous day. Meanwhile, West Texas Intermediate crude oil was also traded at $90.20, which is 82 cents, or 0.9 percent, higher than the previous level.
Analysis of the oil market situation
The November Brent contract is ending while the more active December contract is trading around $97.10. This price difference between the two contracts reflects market concerns about immediate supply versus the outlook for the coming months. Despite the return of oil supply from the Persian Gulf, the risk of disruptions in export routes still exists.
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Additionally, the status of negotiations between the U.S. and Iran is considered one of the pressure factors on the oil market. Lack of significant progress in these negotiations and the continuation of sanctions could exert downward pressure on oil prices. At the same time, the Strait of Hormuz, as one of the world's most important energy passages, remains exposed to geopolitical risks.
Export flow and its effects
Saudi Arabia has resumed loading tankers from the port of Yanbu, and estimates indicate that the East-to-West pipeline flow has reached about 3.5 million barrels per day. The full capacity of this pipeline is approximately 7 million barrels per day. Oil exports from Gulf countries reached 23.3 million barrels per day last week, which is equivalent to the average for 2025.
However, the oil market still does not view this increase in exports as a sign of a complete return to normal conditions. The International Energy Agency has announced that global oil reserves decreased by 95 million barrels in August, with a total reduction of 507 million barrels since February. These factors suggest that an increase in exports does not necessarily mean a rapid fall in oil prices, and there is a need to assess the sustainability of supply flow.
The performance of Brent oil in September has been significantly different from normal days, and this oil is on track to record a monthly growth of about 14 percent. This growth would be the largest monthly increase since July. WTI is also on the verge of recording a growth of about 4 percent this month. On Tuesday, October 7, Brent fell by 2.6 percent to $102.59.
The oil market is currently fluctuating between two conflicting news. On one hand, more oil is entering the market, and on the other hand, supply risks have not been completely eliminated. This situation could have significant impacts on domestic prices of petroleum products and fuels.
