Oil's bearish signals are piling up but here's why Brent is still above $100
Oil prices slipped on Monday as a coordinated release of emergency stocks and a sharp recovery in Middle East exports eased fears of an immediate shortage, although Brent remained above $100 as Gulf security risks kept a geopolitical premium in place. Brent crude traded around $101.50 a barrel, while West Texas Intermediate was near $90.10. The pullback followed the Group of Seven’s decision to release 100 million barrels of crude and fuel products over four months, alongside OPEC+’s move to keep November production targets unchanged. The softer tone masks better crude supply but persistent risks in refined fuels and shipping. Emergency barrels change the near-term balance The G7 plan is aimed at cooling the most stressed part of the market rather than simply flooding it with crude. A significant portion of the release will be diesel, with the first tranche due within 20 days, while governments also pledged to avoid export restrictions. European gasoil and US diesel futures fell sharply after the plan was outlined, showing how much of the recent energy shock had shifted downstream into refined products. The release provides a buffer, not a structural fix. Refinery outages and disrupted fuel exports from the Middle East and Russia have left diesel inventories tight, so the impact will depend on how quickly supply reaches end markets. Middle East exports recover but the risk premium survives The bigger bearish development is the rebound in Gulf crude flows. Kpler data show Middle East exports averaged about 18.5 million barrels a day by October 1, slightly above the pre-war average of 18 million. On several days in late September, shipments reached between 19.5 million and 22.5 million barrels a day. That recovery has been helped by alternative pipelines, ship-to-ship transfers and greater traffic through the Strait of Hormuz. But vessel attacks are increasing. Atleast seven incidents around Hormuz since September 28, while secure shuttle voyages can cost $30 million to $40 million per round trip. Analysts noted that renewed attacks could remove two to three million barrels a day of flows if conditions deteriorate. Rabobank strategists said in analysis carried by FXStreet that improved Hormuz flows and the partial restoration of Saudi Arabia’s East-West pipeline had eased supply fears. They also warned that a larger US military presence could quickly disrupt that normalisation. OPEC+ keeps the downside from opening up OPEC+ added another layer of restraint by keeping November production targets unchanged. Seven core members, including Saudi Arabia and Russia, maintained existing ceilings and will meet again on November 1. Headline quotas still overstate how much oil is reaching the market. Gulf producers remain below their targets after months of war-related disruption. UBS analyst Giovanni Staunovo said in comments published by The Business Times that although flows through Hormuz have improved, actual OPEC+ production remains well below quota. That helps explain why Brent has stayed above $100 despite stronger exports and emergency releases. The next move will depend on whether the recovery proves durable. If G7 barrels arrive smoothly and Gulf exports hold near pre-war levels, Brent and WTI have room to ease further. Another tanker attack, refinery disruption or escalation around Iran could reverse that trade quickly. The post Oil's bearish signals are piling up but here's why Brent is still above $100 appeared first on Invezz