The price of North Sea Brent crude oil fell by one dollar to $114.81 per barrel in trading on Tuesday, November 5. Additionally, U.S. WTI crude oil was traded at $100.88 per barrel, down 88 cents. These price changes occurred following reduced concerns about oil supply to global markets and the outlook for resolving Middle Eastern disputes.
Oil Market Analysis and Influencing Factors
Last week, Brent oil prices reached their highest level in several months, exceeding $117 per barrel, due to recent conflicts in the Middle East. This price increase was influenced by tensions in the region and concerns about the continuation of hostilities. Sugandha Sachdeva, founder of the research firm SS WealthStreet, stated that following the price increases, the market is now witnessing selling to secure profits.
Sachdeva also pointed to new diplomatic efforts in West Asia that have raised hopes for progress in negotiations to end the tensions. However, she emphasized that despite ongoing geopolitical uncertainties, prices remain at high levels.
Supply and Demand Situation in the Oil Market
The research firm ANZ Research issued a note stating that the oil market has become generally vulnerable, with various sectors including supply, logistics, storage, and refining under pressure. The firm also noted a decrease in crude oil exports from the Gulf region, stating that the volume of shipments passing through the Strait of Hormuz has reached about 60% of the normal level.
Moreover, the volume of petroleum product storage globally has been reported to be about 5% lower than the average over the past five years. These factors indicate serious challenges in the oil market and could impact prices.
