Crude oil27 October 2026

Brent near $112 as Saudi attacks and Hormuz risk keep oil near five-month highs

By admin

Crude oil, three months. Chart by TradingView.

Where we are

Brent crude closed at $111.70 a barrel and WTI at $103.27 on 23 October, both near their highest levels since the spring, after a week in which Brent touched $114 and WTI topped $100 [1][2][3]. The move followed renewed Houthi strikes on Saudi Arabia's Shaybah oilfield, Dammam airport and other targets, which pushed Saudi Aramco to evacuate staff from its Dhahran headquarters, plus a pipeline shutdown in Libya [1][4][2]. Brent is on track for a third straight weekly gain and is up about 7.1% over four weeks, while WTI has risen 11.8% over the same stretch [2][3]. US crude inventories fell 3.06 million barrels in the week to 16 October, more than expected, adding further support [5][6].

The macro picture

Washington briefly eased Russia-linked sanctions before clarifying nothing was final, even as Russian crude output rose to 8.43 million barrels per day in September, still below year-ago levels [7]. Iran's floating crude storage has fallen to under 1 million barrels as a US naval blockade tightens, cutting supply to China, its main buyer, while reports say the US and Israel have prepared contingency plans for strikes on Iran after the midterm elections [8][2][9]. Saudi exports hit a five-month high of 4.451 million barrels per day in August even as Saudi output fell to a record-low 6.24 million barrels per day, and India's Middle East imports jumped 32% in September to 2.8 million barrels per day as Gulf flows recovered [10][11][12]. Goldman Sachs said Middle East shipping risk, including tanker freight costs near $20 a barrel versus $3 a year ago, is now a central driver of prices, modelling a range from $80 to $120 a barrel depending on how attacks evolve [13][2]. For Azerbaijan, whose budget revenue and State Oil Fund (SOFAZ) income depend on the oil price, elevated Brent levels support export earnings, while renewed volatility highlights how quickly that support can reverse [7][1].

The chart

WTI's daily trend is up, with the close above both the rising 50-day moving average (92.93) and the 200-day average (85.29), and RSI at 63 [3]. Brent shows the same pattern, trading above its 50-day average (100.73) and 200-day average (91.15), with RSI at 65 [3]. Brent's nearest resistance sits at 126.10, its 52-week high from April, with nearest support at 97.36 and then 96.07 [3]. WTI's nearest resistance is 106.75, then 109.47, with support at 88.66 and 86.86 [3]. Both benchmarks remain well above their 10-week and 40-week averages, reflecting the sharp four-week advance [3].

What would change our mind

A verified, sustained improvement in tanker flows through the Strait of Hormuz and the Bab el-Mandeb passage, alongside a confirmed de-escalation between Saudi Arabia and the Houthis, would ease the geopolitical premium currently embedded in prices [1][14][2]. A finalised and lasting US easing of Russia sanctions, rather than a temporary order later walked back, would also weigh on prices by adding supply [7]. On the chart, a daily close for Brent below the 97.36 support or for WTI below 88.66 would point to a shift in near-term direction, while a close above Brent's resistance near 126.10 or WTI's 106.75 would confirm continued upward momentum [3]. Confirmation that the Indian Oil Corporation's pullback from Middle East term contracts is spreading to other large Asian refiners would also be a signal to watch for shifting demand patterns [15].

Events to watch

US CB Consumer Confidence, Tuesday 27 October, 14:00 GMT [16].
Canada BOC Overnight Rate decision and press conference, Wednesday 28 October, from 13:45 GMT [16].
US FOMC Statement, Federal Funds Rate and press conference, Wednesday 28 October, from 18:00 GMT [16].
US Advance GDP q/q and Core PCE Price Index m/m, Thursday 29 October, 12:30 GMT [16].
Euro area ECB Monetary Policy Statement, Main Refinancing Rate and press conference, Thursday 29 October, from 13:15 GMT [16].
Bank of Japan Monetary Policy Statement, Policy Rate and press conference, Friday 30 October, from 02:30 GMT [16].

Sources

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