Key Takeaways
- • WTI traded near $101 and Brent near $114–$115 after falling roughly 1.7–2% early, as President Trump held off on strikes on Iran and talks resumed, though both benchmarks remain elevated from late-week highs (Brent up about 6% on the week, WTI up 2.3%).
- • U.S. forces in the Middle East are reportedly able to launch major operations against Iran within 96 hours of an order from Trump, targeting energy infrastructure, military sites, and nuclear facilities, with most expecting any large-scale move after the November 3 midterms.
- • ExxonMobil's 275,000 bpd Joliet, Illinois refinery took a 50,000 bpd catalytic reformer offline around October 20, tightening Midwest gasoline supply, which was already at record lows for the season, and pushing some Wisconsin premium prices above $6 a gallon.
- • November natural gas fell to about $2.52–$2.53, down roughly 4% from Friday's $2.640 settlement, as warmer-than-normal forecasts cut heating demand, with U.S. storage at 3,644 Bcf, about 35 Bcf above the five-year average.
- • EU and UK gas stocks remain 170 TWh (17%) below the ten-year seasonal average, with prices above €95/MWh, according to John Kemp.
Summary
Oil prices retreated from Friday's gains as President Trump held off on military action against Iran over the weekend and a new round of talks began. WTI traded near $101 and Brent near $114–$115, both off near six-month highs reached late last week after Houthi strikes on Saudi infrastructure. Qatari mediators traveled to Tehran as part of de-escalation efforts, and senior officials from Saudi Arabia, Turkey, and Pakistan (the Mecca Pact countries) were scheduled for high-level meetings in Tehran. Houthi attacks on Saudi targets continued.
Reports indicate U.S. forces in the Middle East are positioned to launch potentially major operations against Iran within 96 hours of an order from Trump. Officials describe a campaign beyond limited strikes, targeting energy infrastructure, military sites, and nuclear facilities. Most sources expect any large-scale action after the November 3 midterms, though traders are weighing whether action could come before Election Day if talks stall. Market commentary characterized prices as being in a war-premium mode, with downside limited by strike readiness but quick to fall on signs of diplomatic progress.
On the product side, Midwest gasoline prices spiked following an outage at ExxonMobil's Joliet refinery, which took a 50,000 bpd catalytic reformer offline around October 20. The unit produces octane blendstock. Midwest gasoline inventories were already at a record low for this time of year, and retail averages rose in Michigan (into the mid-$4s), Ohio, Illinois, Wisconsin, and Indiana. The Energy Information Administration noted that refining capacity has fallen 4% since 2019, leaving output constrained even as refinery utilization reached its highest level since 1998.
In natural gas, November contracts traded near $2.52–$2.53, down about 4% from Friday's $2.640 settlement, as Fox Weather and other models forecast above-normal temperatures into early November. U.S. production is near record levels, with winter projections around 112.5 Bcf/d, and storage stood at 3,644 Bcf as of October 16. Speculators remain heavily short, so a colder forecast could trigger a rebound. In Europe, according to John Kemp, gas storage is flattening as temperatures fall, with EU and UK stocks rising less than 3 TWh in the seven days to October 24. Stocks remain 170 TWh below the ten-year seasonal average, supporting prices above €95/MWh.
The report also noted an oil spill from a damaged tanker off the UAE coast, which has widened toward the Umm Al Quwain shoreline according to Copernicus imagery from October 24 and Reuters reporting. UAE authorities closed all beaches there, with precautionary closures in Sharjah and Ras Al Khaimah, and linked the leak to the Gem No.2, struck by a projectile around October 9. Authorities said the fuel smell poses no health risk. Separately, the Wall Street Journal reported that Venezuelan opposition leader María Corina Machado returned home after nearly 11 months in exile, a development that could complicate the Trump administration's efforts to manage a gradual political transition with interim President Delcy Rodríguez.
Reports indicate U.S. forces in the Middle East are positioned to launch potentially major operations against Iran within 96 hours of an order from Trump. Officials describe a campaign beyond limited strikes, targeting energy infrastructure, military sites, and nuclear facilities. Most sources expect any large-scale action after the November 3 midterms, though traders are weighing whether action could come before Election Day if talks stall. Market commentary characterized prices as being in a war-premium mode, with downside limited by strike readiness but quick to fall on signs of diplomatic progress.
On the product side, Midwest gasoline prices spiked following an outage at ExxonMobil's Joliet refinery, which took a 50,000 bpd catalytic reformer offline around October 20. The unit produces octane blendstock. Midwest gasoline inventories were already at a record low for this time of year, and retail averages rose in Michigan (into the mid-$4s), Ohio, Illinois, Wisconsin, and Indiana. The Energy Information Administration noted that refining capacity has fallen 4% since 2019, leaving output constrained even as refinery utilization reached its highest level since 1998.
In natural gas, November contracts traded near $2.52–$2.53, down about 4% from Friday's $2.640 settlement, as Fox Weather and other models forecast above-normal temperatures into early November. U.S. production is near record levels, with winter projections around 112.5 Bcf/d, and storage stood at 3,644 Bcf as of October 16. Speculators remain heavily short, so a colder forecast could trigger a rebound. In Europe, according to John Kemp, gas storage is flattening as temperatures fall, with EU and UK stocks rising less than 3 TWh in the seven days to October 24. Stocks remain 170 TWh below the ten-year seasonal average, supporting prices above €95/MWh.
The report also noted an oil spill from a damaged tanker off the UAE coast, which has widened toward the Umm Al Quwain shoreline according to Copernicus imagery from October 24 and Reuters reporting. UAE authorities closed all beaches there, with precautionary closures in Sharjah and Ras Al Khaimah, and linked the leak to the Gem No.2, struck by a projectile around October 9. Authorities said the fuel smell poses no health risk. Separately, the Wall Street Journal reported that Venezuelan opposition leader María Corina Machado returned home after nearly 11 months in exile, a development that could complicate the Trump administration's efforts to manage a gradual political transition with interim President Delcy Rodríguez.
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