West Texas Intermediate crude fell below $85 a barrel on Wednesday for the first time since Aug 31 after President Donald Trump signaled that additional military strikes on Iran are unnecessary, extending a slide since Oct 30 to 22% for Brent and 19% for US oil. While crude has tumbled, S&P 500 and global energy stock gauges have dropped 11% over the same span, with ExxonMobil down 12%, Chevron and BP down 10%, Shell down 9% and TotalEnergies down 7%.
Even after the pullback, major energy stock indexes remain 10% to 17% above their Feb 27 pre-war levels, and December 2027 oil futures trade at $78 a barrel against cash flow estimates that assume $95 Brent. Forecasters project a global supply surplus of 3.7 million to 4.9 million BPD next year if Persian Gulf flows return, though 37 ships were attacked in October and Iran reported two more tankers struck in the Strait of Hormuz on Monday night.
The latest drop follows Tuesday’s settlement at $86.04 for December WTI and $91.49 for January Brent, when the international benchmark briefly dipped under $90 for the first time since August on optimism over Iran and Ukraine peace talks. As December WTI lost $13 a barrel in a week, whole-curve open interest rose by 18,600 contracts amid likely producer hedging focused on the $80 and $100 options strikes, alongside 93 million barrels in futures and options sales by money managers in the seven days through Nov 3.
