Oil Plunges 7% on Progress Toward Hormuz Reopening Deal


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) - Global crude oil futures tumbled more than 7% Monday 
(11/2) as optimism surrounding Qatari-mediated diplomacy gathered momentum, 
with Iranian officials signaling a framework to reopen unhindered commercial 
transit through the Strait of Hormuz.

   NYMEX WTI crude for December delivery settled down $7.66, or 7.36%, at 
$96.46 bbl, recovering slightly after touching an intraday low of $95.15 bbl. 

   ICE Brent crude for January delivery finished down $8.66, or 7.63%, to 
settle at $104.77 bbl, bouncing off an intraday floor of $103.28 bbl. 

   Both WTI and Brent ended October trading up 15% on Friday (10/30), the most 
since July, on fears that military operations could re-escalate in the Strait 
of Hormuz following the U.S. midterm elections on Tuesday (11/3).

   Despite Monday's selloff, major financial institutions warn that upside risk 
remains significant. Market participants noted that while talks continue in 
Doha, the underlying market remains tightly balanced due to depleted 
inventories and maritime security threats.

   "Intensified shipping attacks, damage to oil infrastructure, and a more 
persistent risk premium remain the key triggers of potential upside," Goldman 
Sachs said in a note, raising its Brent forecast to $140 bbl by 2027 if Middle 
East production remained constrained by 3.5 million bpd below 2025 baseline 
levels

   Selling pressure accelerated following reports out of Tehran indicating that 
Iranian negotiators expressed willingness to restore full shipping rights 
through the Strait within two days, provided specific U.S. security guarantees 
discussed in Doha are met.

   Among refined products, NYMEX ULSD for December delivery closed down 
$0.2545, or 5.44%, at $4.4216 gallon, after testing an intraday low of $4.3850 
gallon. 

   NYMEX RBOB gasoline for December delivery ended down $0.2564, or 8.12%, at 
$2.9001 gallon, off an intraday low of $2.8761 gallon. 

   The U.S. dollar index settled 0.121 points lower at 101.624 against a basket 
of foreign currencies, offering negligible support to dollar-denominated energy 
contracts.

   Adding to the bearish sentiment, seven OPEC+ member nations -- including 
Saudi Arabia, Russia, Iraq, and Kuwait -- confirmed in a joint statement that 
they will maintain September 2026 required production baselines into December 
2026.

   The coalition stated it will formally evaluate market fundamentals and 
supply settings during its next scheduled monthly meeting on November 29.




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