Brent near $110

In early October, the price of Brent crude hovered around $100 for an extended period, but the upward trend has since accelerated rapidly. On Monday, October 19, the Brent futures contract for December closed at $109.55 per barrel, having reached nearly $110 earlier, marking its highest level since mid-May. Meanwhile, the U.S. WTI crude contract for November closed at $103.66, its highest closing price since mid-September (Bloomberg). 

The Persian Gulf, and the Strait of Hormuz in particular, remains the greatest enigma and risk factor for the oil markets. According to data from Kpler, crude oil flows from the Persian Gulf fell to an average of approximately 8.5 million barrels per day during the second week of October, down from over 20 million barrels the previous week. Attacks on commercial vessels in the region have also been confirmed, and Iran’s Revolutionary Guard reported that a tanker struck a naval mine in the southern part of the strait (Financial Times). 

Efforts have been made to smooth out the business cycle through political measures:

1. Easing of US sanctions: In mid-October, President Trump signed an order deferring certain tariffs and sanctions targeting Russia’s energy trade in order to bring additional diesel to the market (though the decision faces strong opposition in Congress).
2. Strategic reserves and IEA coordination: At the end of September, the United States announced an emergency release of 40 million barrels from its Strategic Petroleum Reserve (SPR). This is complemented by a joint approach among G7 nations and a decision, confirmed by the IEA in October, to accelerate the release of emergency stocks by member countries in order to alleviate diesel shortages.

At the same time as supply falters, high energy costs are acting as a brake on both consumers and industry. In its October report, the International Energy Agency (IEA) once again lowered its demand forecast for 2026. The agency expects global oil consumption to contract by as much as 2.6 million barrels per day this year, falling to approximately 102.4 million barrels per day. A decline in diesel consumption, in particular, accounts for a quarter of this slowdown (IEA). 

Under normal circumstances, such a sharp drop in demand would cause the price of crude oil to collapse. This has not happened, however, because global oil inventories are already exceptionally low. The IEA estimates that global observed oil stocks are more than 500 million barrels below their February levels. Inventories held in various countries are near their lowest levels since 2016. 

In its latest forecast, the U.S. Energy Information Administration (EIA) has raised its estimate for the price of Brent crude for the remainder of the year (Q4) to $105 per barrel. However, the EIA anticipates that the average price will fall to approximately $84 by 2027, as production disruptions ease and inventories are replenished. 

In early October, the oil-producing group OPEC+ kept its production quotas for November unchanged (OPEC, 2026). This put an end to the phasing out of the 1.65 million barrel-per-day voluntary production cut that had been agreed upon in 2023. Currently, however, these decisions have exceptionally little impact on price formation (Reuters, 2026). 

Disruptions in the Strait of Hormuz and factors limiting Russian flows are keeping actual OPEC+ production well below official targets. The organization’s internal unity has shown cracks following the United Arab Emirates’ departure from OPEC earlier in the spring.

The organization’s next official meeting will be held on November 1, but the market is looking primarily at physical shipment statistics rather than quotas.

From a technical perspective, the $110 price range may emerge as both a technical and psychological resistance zone. The price oscillating right around this level suggests that the market appears to be consolidating at current levels, with buyers hesitant to push the price higher in the absence of new geopolitical catalysts. 

Fundamentals continue to support rising prices; however, following the sharp rally seen over the past few weeks, the possibility of a downward correction should not be overlooked. If the $110 level is broken more decisively to the upside, the next technical resistance may be found near the peaks from the spring of 2026. Should the price begin to decline, technical support could be found at levels such as the moving averages shown on the chart (e.g., EMA25, SMA50).

In the oil market, there is currently a tug-of-war between the heightened geopolitical tension in the Persian Gulf and the impact of high fuel prices on demand. Although supply remains tight due to disruptions in the Strait of Hormuz, the rally in Brent crude has encountered technical resistance at the $110 level. At the same time, exceptionally low global inventories may provide support for prices and could prevent a sharper downward slide.

• SMA200: 200-day moving average, red.
• SMA50: 50-day moving average, blue.
• EMA25: 25-day exponential moving average, yellow.