Crude oil prices fall for fourth day after Brent drops 8.7% to $94.62

Crude oil prices continued to decline on November 5 as Brent futures decreased 8.7% on the session to $94.62 a barrel, while WTI futures sank 8.3% on the session to $88.12 a barrel. As of around 9:35 AM, Brent crude was decreasing 0.62% on the day at $94.03 a barrel, while WTI crude plummeted 1.13% on the day to $87.12 a barrel. According to Reuters, markets were assessing the impact of the US midterm elections on the likelihood of war with Iran. In terms of the elections’ impact, energy consultant, Mukesh Sahdev, CEO of XAnalysts noted that even though the United States’ Congress changed hands, United States’ policy options will not immediately change as the new Congress does not take office until January.

Brent and WTI extend declines after 8.7% and 8.3% falls

Brent futures settled at $94.62 after falling 8.7% in the previous session. West Texas Intermediate futures settled at $88.12 after falling 8.3% in the previous session.

At around 9:35 AM on November 5, Brent futures were down 0.62% at $94.03 a barrel. At the same time, West Texas Intermediate was down 1.13% at $87.12 a barrel.

Both benchmarks recorded their lowest settlement levels since August 31 in the previous session.

Congressional control shifts as Iran diplomacy remains unresolved

Democrats are set to take control of the House of Representatives and Senate in the US midterm elections, Reuters reported. Two sources close to the governments of the Gulf states said the development would increase pressure on the Trump administration to agree a negotiated settlement with Iran.

The same sources said a full-scale assault on Iran appeared less likely. Sahdev said the incoming Congress would not take office until January, so United States policy options had not immediately changed.

A senior Iranian official told Reuters today that there is still a wide gap between Iran’s and Washington’s positions on key terms for bringing the war to an end.

The UAE considers a third pipeline around the Strait of Hormuz

The United Arab Emirates is considering a third oil pipeline to pump crude out of the region around the Strait of Hormuz, Bloomberg reported citing people familiar with the matter. The new pipeline is part of the UAE’s strategy to wean the country off the narrow waterway.

JPMorgan reports a 1.4 million-barrel-per-day surplus

The amount of oil brought into the market from the Gulf for our September supply return estimate was sufficient to create a global oil surplus by the end of the month of 1.1m/d. By October this surplus had increased to 1.4m/d and was just short of last year’s average for the period of 1.3m/d.

EIA’s weekly update reported a decline in crude oil, gasoline and distillates stocks. Year to date (YTD) U.S. petroleum demand was reported at its highest level for the year.