Brent hits $107.25 as the energy ceasefire frays and the IEA eyes diesel
Hormuz risk and Russia-Ukraine doubts keep oil near a one-month high.
What happened
Brent crude reached $107.25, its highest since Sept. 16, after Iran reported that an oil tanker had been hit and was ablaze in the Strait of Hormuz, while WTI spiked past $94 per barrel. Earlier on Monday oil prices had fallen after Donald Trump announced an "energy ceasefire" between Russia and Ukraine, which offset a fresh wave of Houthi attacks on Saudi Arabia. The International Energy Agency called on its members to accelerate previously agreed releases from strategic oil reserves, prioritising diesel.
Sources: Cointelegraph, Euronews. Details
Why it matters
Fuel costs feed straight into inflation readings, and US CPI arrives on Wednesday. Brent is up +75.27% this year and +3.01% so far in October.
What history shows
Brent has averaged -1.01% in October, with 53% of Octobers higher across 19 years since 2007.
Seasonal backdrop
November is the weakest month for Brent on average, at -2.91%, with 47% of Novembers higher. Seasonality sits against a supply shock this year, so the pattern is context only.
Scenarios
Possible paths and the signs that would point to each. No probabilities. Testable ones are graded on the scorecard.
Risk premium builds
More shipping incidents near Hormuz or a collapse of the ceasefire keep crude bid.
- Further tanker incidents in the Strait of Hormuz
- Reports of Russia and Ukraine striking energy sites again
Premium drains
Shipping volumes improve and strategic reserve releases ease diesel tightness.
- Faster IEA reserve releases
- Calmer Hormuz transit reports
What to watch
- US CPI on Wednesday
- IEA meeting outcome on diesel releases
Sources and method (3)
- Brent crude reached $107.25, its highest since Sept. 16, after Iran reported that an oil tanker had been hit and was ablaze in the Strait of Hormuz, while WTI spiked past $94 per barrel. Cointelegraph, Oct 12
- Oil prices fell early Monday after Donald Trump announced an "energy ceasefire" between Russia and Ukraine, which offset a fresh wave of Houthi attacks on Saudi Arabia. Euronews, Oct 12
- The International Energy Agency called on its members to accelerate previously agreed releases from strategic oil reserves, prioritising diesel, and to assess whether additional diesel releases are necessary. Euronews, Oct 12