Brent Falls to $91.49 and WTI to $86.04 as Trump Signals Restraint on Iran, but Hormuz Ship Attacks Lift Crude Wednesday

ING strategists Ewa Manthey and Warren Patterson told clients that the market "has continued to unwind some of the geopolitical risk premium" built into prices, CNBC reported. For scale: Brent started the year near $60, reached about $130 in March and April, and was still near $118 in late October, so even $92 is far above where it began.

What is holding crude up?

The ships. The Washington Institute for Near East Policy counted 37 vessels attacked in October, the highest monthly total since the war began, with ten more in the first days of November, Reuters said. On Tuesday the UK maritime agency reported a tanker struck near Oman, and Iran's Revolutionary Guards said two tankers caught fire after hitting mines on an unauthorised route, according to the same reporting.

Diplomacy is not as settled as the headlines suggested either. After Trump spoke, an Iranian security official said no talks were taking place, and prices recovered part of a drop of more than $3. LSEG analysts wrote on Tuesday that even if a deal is struck, more flows through Hormuz would depend on mine clearance, insurance costs and whether shipowners will take the risk. Fereidun Fesharaki of FGE told CNBC he sees no near-term peace deal because the two sides are too far apart.

Inventories add a mixed signal. The American Petroleum Institute reported a 9 million barrel rise in US crude stocks for the week ended 6 November, according to market sources cited by Reuters. The US Strategic Petroleum Reserve, meanwhile, stood at 279.5 million barrels on Monday, its lowest since October 1982. Russia is a further wild card: industry sources say its refining capacity is down about 30 percent since late October after Ukrainian drone attacks.

What to watch next

Official US inventory data from the Energy Information Administration is due later on Wednesday and will test the API build. Beyond that, the barrel is trading on two competing stories: a diplomatic track that keeps losing a dollar at a time on every hopeful headline, and a shipping lane where the attacks have not slowed. Until one of them breaks, $90 looks like the line traders are testing.