Oil Prices Today: Brent Reclaims $100 After Two-Day Rebound

Oil prices today show Brent crude back above $100 a barrel after a two-day rebound, with traders betting that the tanker attacks in the Strait of Hormuz will keep supplies tight. Brent crude futures rose about 2 percent to $100.30 a barrel on Friday, November 6, while US West Texas Intermediate, known as WTI, advanced about 1.5 percent to $91.80 a barrel.

The rebound follows a sharp sell-off earlier in the week, when both benchmarks tumbled more than 8 percent to their lowest levels since August 31. Oil prices today are higher than they were on Wednesday, but both benchmarks are still on course for weekly losses of around 12 percent, the biggest weekly fall in months.

Oil Prices Today: Brent Back Above $100

On Friday morning, Brent crude futures for January delivery traded at about $99.20 to $100.30 a barrel, after briefly crossing $100, while WTI traded at about $91.38 to $91.80. The January Brent contract is the reference contract now, because the December contract expired on October 30.

The gains extended Thursday's recovery, when Brent jumped $3.67, or 3.88 percent, to settle at $98.29 a barrel, and WTI added $2.40, or 2.72 percent, to finish at $90.52 a barrel. Friday was the second straight session of gains, and it marked a reversal from Wednesday, when both benchmarks tumbled more than 8 percent.

Oil prices today reflect a market that is torn between two forces. Hopes of an end to the US-Iran war, after the Democrats swept the midterm elections, pulled prices down. Fresh attacks on tankers in the Strait of Hormuz pulled them back up, because every attack raises the fear that oil supplies could be disrupted.

Oil Prices Today: The Week in Numbers

The week has been one of the wildest for oil in years. On Wednesday, Brent fell $8.98, or 8.7 percent, to close at $94.62 a barrel, while WTI declined $7.97, or 8.3 percent, to settle at $88.12. Both benchmarks ended at their lowest closing levels since August 31.

Selling pressure continued on Thursday, when Brent futures fell 50 cents, or 0.53 percent, to $94.12 a barrel at one point, before the rebound began. By Friday, Brent was back above $100, but the weekly loss was still about 12 percent for Brent and about 12.1 percent for WTI.

JPMorgan estimated on November 4 that supply exceeded demand by 1.1 million barrels a day in September, with the surplus widening to 1.4 million barrels a day in October. That surplus is one reason prices fell so fast, and it is also why analysts say the rebound may not last if the Iran war eases.

Why Oil Prices Rebounded

The main reason for the rebound is the tanker attacks. Attacks on tankers in the Gulf have continued at a pace close to record levels, with at least five vessels reporting incidents since Sunday, according to the United Kingdom Maritime Trade Operations. Fresh incidents near the Strait of Hormuz supported prices, while hopes that the Iran war could ease continued to pull them lower.

Traders also viewed Wednesday's sell-off as overdone. Crude oil rebounded as traders viewed Wednesday's selloff as overdone, ANZ strategist Daniel Hynes said in a Friday note. When prices fall 8 percent in a day on hopes of peace, any sign that peace is not coming quickly can trigger a sharp bounce.

Goldman Sachs has raised its oil price forecasts, citing increasing risks to global supplies. The bank raised its December Brent crude forecast to $105 per barrel from $90 earlier. The Eurasia Group said that despite the recent decline, Brent crude could rise to between $110 and $125 a barrel if the conflict widens.

What It Means for Pakistan

For Pakistan, oil prices today matter because the country imports most of its fuel, and the government has just moved to a daily price review. On Thursday, the Oil and Gas Regulatory Authority cut petrol by Rs9.41 to Rs352.59 a litre and diesel by Rs5.56 to Rs382.25, effective November 6, after Brent crashed.

If Brent stays above $100, the next daily reviews could push domestic fuel prices back up just as fast. The same mechanism that passed on the cut within a day will pass on a rise within a day, so motorists should expect more frequent, smaller changes instead of the big fortnightly jumps of the past.

The rebound is also a reminder that the relief at the pump depends on the war. If the Iran war eases, oil could fall again. If the tanker attacks continue, or the conflict widens, oil could rise toward $110 or $125, and Pakistan's fuel prices would follow. For now, the market is watching the Strait of Hormuz as closely as it watches the negotiations.

Oil Prices Today: Frequently Asked Questions

What are oil prices today? Brent crude is trading above $100 a barrel and WTI is near $92, after a two-day rebound on tanker attacks in the Strait of Hormuz.

How much did oil fall this week? Brent crashed 8.7 percent to $94.62 on Wednesday and WTI fell 8.3 percent to $88.12, their lowest levels since August 31. Both are still down about 12 percent for the week.

Why did oil prices rebound? Fresh attacks on tankers in the Strait of Hormuz renewed supply fears, and traders viewed Wednesday's sell-off as overdone. Brent rose $3.67 on Thursday and kept climbing on Friday.

What do analysts expect next for oil prices? Goldman Sachs raised its December Brent forecast to $105 from $90. The Eurasia Group says Brent could reach $110 to $125 if the conflict widens.

What does it mean for petrol prices in Pakistan? Pakistan now reviews fuel prices daily. If Brent stays high, the next reviews could push petrol and diesel prices back up, just as fast as the recent cuts came down.