Brent Oil: Prices reverse on supply headlines – Deutsche Bank

Deutsche Bank’s Jim Reid and team highlight a sharp intraday reversal in Brent Oil, with front-month prices dropping even as longer-dated contracts grind higher. Saudi supply normalization and a final US Strategic Petroleum Reserve release weighed on spot Brent, while December 2027 futures hit new highs, suggesting markets still price prolonged disruption despite near-term relief.

Spot weakness but curve stays firm

"At the European open, it looked like we were set for another day of gains, with Brent crude initially rising to $107/bbl. However, several headlines contributed to the pullback, including a Reuters report that Saudi Arabia had resumed oil loadings from the port of Yanbu."

"Meanwhile, the US announced that it will offer up to 40m barrels from its Strategic Petroleum Reserve, in what would be its last drawdown in the coordinated global release of oil announced earlier in the year. So that helped oil prices stage a decent intraday turnaround"

"Yet even with the pullback in oil and gas prices, investors struggled to get too excited. There are still no obvious signs of progress towards a deal, and we actually saw longer-dated Brent futures move up once again, with the December 2027 future up another +0.65% yesterday, reaching a new high of $80.81/bbl. So for investors, they’re still pricing in a lengthier period of disruption, even as increased oil flows out of the Gulf have eased the near-term pressure."