Oil market slips as traders await U.S. midterm results and Middle East signals

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Oil market slips on midterm results

Highlights

Brent futures fall 0.25% to $103.34 and U.S. WTI crude drops 0.55% to $95.56 as traders await U.S. midterm results and Middle East signals.
U.S. crude stocks decline by 5.27 million barrels versus analyst expectations for an 880,000-barrel build, while gasoline stocks rise 1.43 million barrels and distillates fall 1.19 million barrels.
U.S. conducts limited defensive strikes on Iran's Qeshm island amid ongoing indirect U.S.-Iran talks and increased Qatari mediation, heightening geopolitical uncertainty in oil markets.

Election uncertainty and conflict talks shape trading

As reported by Reuters, Brent futures fall 26 cents, or 0.25%, to $103.34 a barrel by 0157 GMT, while U.S. West Texas Intermediate crude futures lose 53 cents, or 0.55%, to $95.56.

In the previous session, Brent eases more than 1% to its lowest level in nearly four weeks as traders weigh talks aimed at ending the wars in Ukraine and Iran. Vote counting is underway in the U.S. midterm elections, which determine whether Trump's Republican Party retains control of Congress for the rest of his second term.

Markets also remain alert for progress in talks to end the U.S.-Israeli war with Iran, with Qatar stepping up mediation efforts to prevent a further escalation after the U.S. midterm elections. A senior Iranian official tells Reuters on Tuesday that Iran and the United States remain far from a deal to end their war.

The United States carries out what a U.S. official describes as defensive strikes on Iran's Qeshm island, targeting surface-to-air missiles used against U.S. assets. Another official says the strikes appear limited and do not signal a return to major combat operations.

Inventory data offers support to prices

U.S. crude stocks fall by 5.27 million barrels in the week ended October 30, market sources say, citing data from the American Petroleum Institute. That contrasts with expectations from eight analysts polled by Reuters for an average increase of about 880,000 barrels in crude inventories.

Gasoline stocks rise by 1.43 million barrels, while distillate inventories fall by 1.19 million barrels from a week earlier. Haitong Futures says in a note that diesel inventories remain tight, while gasoline stocks rise more than expected, leaving the data broadly supportive of oil prices.

Traders now await official U.S. inventory figures from the Energy Information Administration, due at 10:30 a.m. EST, or 1530 GMT, on Wednesday. The data could help clarify whether tighter crude supplies offset the broader geopolitical uncertainty weighing on the market.

Our earlier article on the WTO’s warning about conflict-driven trade disruptions explained how the wars in Ukraine and the Middle East are forcing companies to redesign supply chains and shipping routes, often at higher cost, to improve resilience. It also highlighted the WTO’s expectation of sharp declines in Middle East exports and imports, alongside the risk that recurring conflicts and tariffs could keep global trade fragmented even after tensions ease.

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