Oil rallies 3% as Iran talks stall and Ukraine talks bring no breakthrough

Brent for January delivery climbed 3.31% by 9:27 am ET and sold for $94.64 per barrel. West Texas Intermediate for December delivery jumped 2.86%, fetching $88.5 per barrel. The push higher came as conflicts in the Middle East and Ukraine stoked worries about long-term pressure on global energy markets.

The diplomatic track offered little relief. Prospects for a negotiated settlement between the United States and Iran stayed uncertain, and the latest Ukraine trilateral talks in Abu Dhabi showed no conclusive breakthrough.

OPEC's November report, published Wednesday, raised its estimate for global economic growth in 2026 to 3.1%, up from 3%, while holding its 2027 prediction at 3.2%. The cartel lifted its US GDP forecasts by 0.1 percentage points each, to 2.3% for 2026 and 2.1% for 2027, and revised Eurozone growth up by 0.2 and 0.1 percentage points to 1% in 2026 and 1.1% in 2027.

On the demand side, OPEC expects global oil consumption to grow by 0.2 million barrels per day year on year in 2026, unchanged from its previous forecast, and kept its 2027 growth outlook at 2.6 million bpd. Liquids production from countries outside OPEC's Declaration of Cooperation is still seen rising by 0.6 million bpd in 2026, led by Brazil, the United States and Canada.

US inventory data pointed the same direction. Crude stockpiles slumped by 9.8 million barrels in the week ending November 6, a bigger drawdown than expected, according to private American Petroleum Institute figures reported Tuesday. Distillate inventories fell 8 million barrels, gasoline stockpiles grew 2.7 million barrels and reserves in Cushing, Oklahoma, jumped 5.1 million barrels.

The Energy Information Administration said Tuesday it expects Brent spot prices to stay near $100 per barrel for the rest of the year, with WTI averaging $88.29 by year-end. It noted crude rose for a third straight month in October, citing falling global inventories, attacks on oil tankers in the Persian Gulf, constrained shipping capacity and higher transportation costs tightening supply.