Oil Prices Stage a Rebound

In a market analysis sent to Rigzone on Wednesday, Konstantinos Chrysikos, Head of Customer Relationship Management at Kudotrade, highlighted that “oil prices staged a rebound today, recovering from their recent five-month lows”.

“The market reacted positively to the news that the U.S. Department of Energy is seeking to purchase approximately one million barrels for the Strategic Petroleum Reserve (SPR),” Chrysikos said in the analysis.  

“Additionally, the potential for a U.S.-India deal that may cut Russian flows and tighten the market lifted prices. Hopes regarding U.S.-China trade improvement could support demand expectations and help improve the outlook,” he added.

Chrysikos went on to state in the analysis, however, that “the market could face a persistent global supply surplus, driven by record-high U.S. production and OPEC+’s commitment to planned output increases”.

“These factors, combined with forecasts from major agencies pointing to continued inventory builds and slower global demand growth, could cap significant price gains,” Chrysikos warned.

In a separate market analysis sent to Rigzone today, Rania Gule, a senior market analyst at XS.com-MENA, pointed out that, “historically, the trade relationship between the U.S. and China has had a direct impact on oil price dynamics, as the two economies together account for more than one-third of global energy consumption”.

“Consequently, any sign of easing or escalation in their trade dispute immediately reverberates through markets,” Gule added.

In a Skandinaviska Enskilda Banken AB (SEB) report sent to Rigzone by the SEB team on Wednesday, SEB Commodities Analyst Ole R. Hvalbye noted that, “so far this week, Brent crude has climbed by roughly $2.5 per barrel from Monday’s low of $60.07, the weakest print since early May”.

“The slight recovery in Brent this week suggests that the recent downward momentum has eased, though the market remains highly sensitive to short-term headlines,” Hvalbye said in the report.

“Trade diplomacy and geopolitical risk continue to dominate sentiment, while underlying fundamentals still point to a market in surplus heading into winter, with the trajectory now heavily dependent on OPEC+ strategy going forward,” he added.

In a report sent to Rigzone by the Standard Chartered team today, which was dated October 21, Standard Chartered Bank Energy Research Head Emily Ashford warned that crude oil sentiment is currently “overwhelmingly negative”.

“We expect near-term weakness driven by perceived market oversupply and global demand indicators,” Ashford said in the report.

“Low prices then start to quash U.S. shale output growth, and if OPEC+’s return of barrels is sustained, the market will highlight tightness and geographic concentration of spare capacity, which we expect to be supportive in the medium term,” Ashford added.

The Standard Chartered Bank Energy Research Head noted in that report that Brent’s weakness had “continued for a further week”.

“Brent blend for December delivery settled at $61.01 per barrel (bbl) on 20 October; a fall of $2.31/bbl w/w and the lowest settlement price for 24 weeks,” Ashford said.

“SCORPIO, our machine learning model, was directionally correct in its forecast, but underestimated the scale of the w/w decrease when it expected $0.40/bbl w/w fall to $62.92/bbl settlement on 20 October,” Ashford added.

“Prices fell to an intra-day low of $60.07/bbl on 20 October, with $60/bbl representing an important psychological level,” Ashford continued.

Ashford went on to state in that report that several technical signals are pointing towards prices being in oversold territory.

“The relative strength index fell to 31.85 on 16 October and is only slightly higher now (35.08 at the time of writing),” Ashford noted in the report.

The Standard Chartered Bank representative highlighted in the report that Standard Chartered recently adjusted its price forecasts for Brent, WTI, and Dubai crude, “triggered by the significant rotation in the forward curve seen over the last year”.

“The curve is now in contango from early-2026 onwards,” Ashford warned.

“For Brent, the 2025 average rises to $68.50/bbl (from $61/bbl), 2026 decreases to $63.50/bbl (from $78/bbl), and 2027 falls to $67/bbl (from $83/bbl). These price adjustments reflect near-term weakness, followed by a long-term steady but gradual increase,” Ashford added.

“We see near-term softness, reflected in overwhelmingly negative sentiment, driven by trade war and tariff uncertainty and oversupply fears. Low prices then start to quash U.S. shale output growth, and if OPEC+’s return of barrels is sustained, this will highlight tightness and the geographic concentration of spare capacity, which should be supportive in the medium term,” Ashford continued.

To contact the author, email andreas.exarheas@rigzone.com