Key Highlights

  • WTI crude futures rose 1.72% to about US$96.72 a barrel during today’s session.
  • Traders assessed possible supply disruptions after attacks on ships in the Strait of Hormuz.
  • US crude stocks declined by 11.1 million barrels last week, latest industry data showed.
  • The IEA warned diesel market tightness could persist well into next year.

West Texas Intermediate, the US oil benchmark, rose during today’s session as traders assessed potential supply disruptions following attacks on ships passing through the Strait of Hormuz. WTI futures for November delivery traded near US$96.72 a barrel, up US$1.63, or 1.72%, on the day.

CME NYMEX Benchmark Performance and Cushing Storage Dynamics

WTI is still 5.53% lower than a month ago but 69.79% above its level a year earlier, according to market data. A market forecast for the fourth quarter stands at US$95.54 a barrel, slightly below current levels. International benchmark Brent futures for December delivery moved the other way, slipping 0.67% to about US$105.35.

The WTI contract is physically delivered at Cushing, Oklahoma, a storage hub often described as the pipeline crossroads of the world. Because delivery happens there, the futures price reflects physical balances across the continental pipeline network, not only sentiment about global events.

EIA Petroleum Statistics and Domestic Inventory Trends

Weekly inventory reports from the US Energy Information Administration are among the most closely watched data points for WTI, since they show whether domestic crude supplies are building or drawing. The latest industry data showed US crude stocks declined by 11.1 million barrels last week.

Inventories overseas are also tight. The International Energy Agency said in its October oil report, released Wednesday, that land-based inventories had fallen close to their lowest levels in at least a decade. The agency also forecast that global oil consumption would contract by 2.6 million barrels per day in 2026.

Permian Basin Production Disciplines and Upstream Constraints

US crude supply is anchored by the Permian Basin of West Texas and southeastern New Mexico, alongside the Bakken of North Dakota and the Eagle Ford of South Texas. Producers in these basins rely on large-scale pad drilling, extended horizontal laterals and re-fracturing to maximize recovery per well. Consolidation has placed much of the best acreage with large operators that run under capital discipline, so output tends to respond steadily to prices rather than in sharp bursts.

The supply risk driving today’s trading sits elsewhere. Houthi missile and drone attacks on Saudi Arabia have raised further concerns about potential disruptions to exports, and some tankers are reportedly avoiding their usual loading areas. The IEA said the fresh attacks threaten to derail a recovery in oil supply. Even so, Firas Bechwaty, head of business development at online trading platform ICM, noted that Saudi crude continues to reach international buyers through alternative routes.

Refined Product Demand, Crack Spreads and Refinery Runs

Refiners turn crude into gasoline, diesel and jet fuel, and the margin between feedstock costs and product values, known as the crack spread, shapes how much crude they want to buy. Middle distillates such as diesel and jet fuel have been the tightest part of that market.

The IEA cautioned in its report that constraints in diesel markets could continue well into next year. Diesel is a global market, so tightness abroad can support demand for US crude from refiners looking to maximize distillate output.

Macroeconomic Transmission: Inflation, Interest Rates and Retail Gas

Oil prices feed quickly into the broader economy. Energy costs flow into consumer and producer price indexes and raise operating costs for aviation, trucking, farming and manufacturing, which complicates the Federal Reserve’s task on inflation and interest rates. At the pump, higher crude eventually means higher gasoline prices, which act like a tax on household spending.

Geopolitics is keeping that risk in view. A Singapore-registered ship was sunk in the critical waterway, raising worries of a prolonged Middle East conflict. “Such attacks are unprovoked, unjustifiable and a breach of international law,” the Singapore maritime authority said in a statement on Wednesday. Iran has said it is “counting the moments” until it can start striking US warships.

Strategic Petroleum Reserve Policy and Forward Global Catalysts

The US Strategic Petroleum Reserve, drawn down substantially during the 2022 energy crisis, remains a policy tool for managing supply shocks. Globally, accelerated emergency stock releases by IEA members provide an additional buffer, which Bechwaty said is preventing a sharp rise in prices even as tensions remain elevated.

On diplomacy, he said the lack of progress on the US-Iran diplomatic track “leaves little immediate prospect of a full reopening of the waterway.” To help ease prices, the Trump administration is considering easing sanctions on so-called shadow fleet vessels that carry oil and petroleum products from countries such as Russia, according to media reports.

WTI’s latest gain sits alongside a one-month decline of 5.53%, so the market has been moving in both directions. The factors to watch next are the Hormuz diplomatic track, Saudi export routes, the pace of emergency stock releases and any move on shadow fleet sanctions, set against the IEA’s forecast of lower global consumption and the fourth-quarter forecast of US$95.54 a barrel.