Brent crude holds above $100 despite oil price dip

Oil prices saw a dip on Monday as fears of an immediate supply shortage eased, thanks to a coordinated release of emergency stocks and a recovery in Middle East exports. However, Brent crude remained above $100 due to lingering geopolitical risks. Brent crude traded around $101.50 a barrel, while West Texas Intermediate was near $90.10.

The pullback followed the Group of Seven’s decision to release 100 million barrels of crude and fuel products over four months, alongside OPEC+’s move to keep November production targets unchanged. The G7 plan focuses on cooling the most stressed part of the market, particularly diesel, with the first tranche due within 20 days. Governments also pledged to avoid export restrictions, which helped European gasoil and US diesel futures fall sharply.

A significant bearish signal came from the rebound in Gulf crude flows. Data from Kpler showed Middle East exports averaging about 18.5 million barrels a day by October 1, slightly above the pre-war average of 18 million. However, vessel attacks around the Strait of Hormuz have increased, with at least seven incidents since September 28. Analysts warned that renewed attacks could remove two to three million barrels a day of flows if conditions deteriorate.

OPEC+ added another layer of restraint by keeping November production targets unchanged. Seven core members, including Saudi Arabia and Russia, maintained existing ceilings and will meet again on November 1. UBS analyst Giovanni Staunovo noted that despite improved Hormuz flows, actual OPEC+ production remains well below quota, helping Brent stay above $100.