#WCTCS9 #广场交易达人 Down 16% in one week! War premium collapses: three oil price scenarios for next week

WTI settled at $90.83 and Brent at $98.32—the daily gain last Friday was only 0.34%, but that doesn't mask the brutal week: WTI fell about 12.8% for the week, while Brent dropped about 16.4%, its biggest weekly decline since 2020.

One week ago, the market was still pricing in a premium for the situation in the Middle East; one week later, oil prices had shed a full $20.

【Why the collapse: three forces combine】

First, progress in U.S.-Iran talks caused the war premium to collapse instantly. On November 3, positive signals from the talks sent WTI plunging about 7.3% in a single day; after the midterm elections, expectations for a U.S.-Iran thaw rose further, and oil prices fell about $20 in two days.

Second, supply expectations eased. OPEC+ decided on November 1 to keep output unchanged in December—marking the third consecutive month of holding steady, with policy focus shifting to quota talks for 2027; exports from Saudi Arabia and three other countries also rose about 10% in October.

Third, demand is weak. The four-week average of total U.S. oil demand was up just 0.2% year over year, while distillates continued to decline; China’s crude oil imports were weak in September. High oil prices are killing their own demand.

【But the bearish case has an offsetting factor】

For the week ending October 30, U.S. crude inventories unexpectedly fell by 865k barrels to 409.8 million barrels, while the market had expected an increase of 877k barrels; gasoline and distillates also saw simultaneous inventory drawdowns.

This is solid bullish evidence, but for now it has been overshadowed by the geopolitical narrative.

【Three scenarios for next week (November 9–15)】

Scenario 1: Wide-range trading after an oversold rebound (base case)

WTI: $87–95, Brent: $94–102. After a 13%–16% weekly plunge, there is strong demand for a technical recovery, and inventory draws provide support; however, if verifiable signs of an agreement emerge from U.S.-Iran talks, the remaining war premium will continue to shrink.

Scenario 2: Geopolitical tensions flare up again (upside risk)

Rapidan Energy warned that after the midterm elections, the probability of the U.S. resuming military action against Iran in the coming days is 80% (an institutional view, not a fact). If that happens, oil prices could spike, with WTI breaking above $95 and testing $100, and Brent heading above $105.

Scenario 3: A breakthrough in negotiations + hawkish CPI (downside risk)

If WTI breaks below the support band formed by the low of $86.65 and the MA200 (around $87), it would open the door to further downside, toward $85 or even $82; the corresponding Brent support is around $93.

【Remember the key levels: 86.5–87 is the line in the sand】

WTI: support at 86.5–87, resistance at 95–100;
Brent: support at 93, resistance at 100–105.

【Five things to watch next week】

First, “textual evidence” from U.S.-Iran talks—whether there is a verifiable interim agreement matters far more than verbal signals;
Second, U.S. October CPI at 21:30 on Tuesday—the dollar strengthening would pressure oil prices, while a weakening dollar would have the opposite effect;
Third, EIA inventories on Wednesday—will the drawdown continue?
Fourth, the three monthly reports from the EIA, OPEC, and IEA midweek—will the supply-demand balance sheets be rewritten?
Fifth, any news related to the Strait of Hormuz—this is a variable that can make oil prices change direction instantly.

In a nutshell: this round of declines is about the “war premium,” not a “collapse in demand.” The unwinding of the premium is not over, but inventories and oversold conditions have provided a buffer—next week is more likely to see wide-range trading than a trend decline.

What do you think? Is this oil price move a “golden buying opportunity” or a “bottomless pit”?

The above is personal analysis and does not constitute investment advice.