Brent Crude Oil (BZ) Retreats to $105 After Monday's $110.70 Five-Month High

Brent Retreats From $110.70

Brent crude, the global benchmark that sets the price of much of the world's seaborne oil, hit $110.70 a barrel on Monday, its strongest level since May 20, after fresh attacks on shipping through the Gulf pushed war risk back to the center of the oil market. The spike has not held: Brent futures have since eased to about $105, COINOTAG data shows, a retreat of 1.75% over the past day. The attack record behind the rally is specific. Kpler counted 18 reported attacks on vessels across the Gulf in two weeks, and Iran has vowed to take control of the Strait of Hormuz, the chokepoint for the region's crude exports, a pledge that extends its pressure campaign ahead of the US midterms. Saudi Arabia has been hit directly: a confirmed strike on Oct. 14 struck Aramco's headquarters, and the Houthis claim further attacks, though those claims remain unconfirmed. Supply outside the Gulf is damaged as well, after a Ukrainian strike knocked out a crude unit at Russia's Ryazan refinery. Inventories leave no cushion, because onshore oil stocks sit at their lowest level since at least 2016, according to the International Energy Agency. Refined products add their own squeeze: diesel topped $200 a barrel in September, nearly double the price of the crude it is made from. OPEC+ kept its November output targets unchanged, so no extra barrels are scheduled from the producer group near term. Barrels are nonetheless returning, with Gulf oil flows recovered to about 80% of prewar levels according to US Energy Secretary Chris Wright, a gap between physical supply and freight risk that keeps the premium in place. Dutch bank ING said prices remain well supported and that the market “is pricing in a significant risk premium” while the situation stays volatile.

The $110 Barrel Reaches Pumps and CPI

Drivers absorb the cost first. US regular gasoline averages $4.33 a gallon, more than $1 above the level of a year ago, and AAA's tracking shows pump prices barely moving while crude stays high. The fuel bill then feeds into headline inflation: the consumer price index release from the Bureau of Labor Statistics put US inflation at 3.7% in September, with energy alone up 20.4% year over year. Traders now expect another rate hike in December as a result, which extends the oil shock into the broader rates picture, and the September reading is the inflation backdrop voters carry into the midterms next month. Households without energy stocks carry that bill, and investors with them collect it. The S&P 500 energy sector has gained 51% this year through Oct. 14, according to Opening Bell Daily data, against roughly 13% for the broad index over the same stretch. Investors without commodity futures access get that exposure through energy stocks, and some take it into leverage through stock perpetuals on the largest producers. The forecast split is wide. Goldman Sachs estimates about $25 of Brent's price is war premium, which implies roughly a quarter of the barrel is geopolitics rather than scarcity, and forecasts $90 by December. June Goh, senior oil market analyst at Sparta Commodities, sees Brent rangebound around $100, saying markets appear “unwilling to absorb the higher prices” while the rest of the economy does not look rosy.

The pullback leaves Brent (BZ) trading at $105.15, down 1.75% over the past day, inside a 24-hour range of $102.70 to $108.14. COINOTAG's composite scoring rates the $104.92 support at 94 out of 100 and the $106.83 resistance at 73, so Monday's high sits just above the nearest cap. Momentum stays constructive, with the daily RSI at 60.2, the trend label still an uptrend and perpetual open interest near $238.1 million. A daily close below $104.92 would put the $98.78 shelf in play; holding it keeps Brent's five-month advance intact at around $105.