Weak oil prices on Thursday evening suddenly surged nearly $3 from intraday lows within minutes, briefly reversing what had been a gradually weakening intraday trend.
Although prices pulled back again after the spike, crude rose once more in the early hours and closed with a long bullish candle, as geopolitical premium began to re-enter the market — though the question remains how much can gradually be added this time.
The reason for the sudden move was that Trump posted a statement in the evening saying there was no need to reach a deal with Iran, and oil prices jumped immediately.
According to the post, Trump said the era of making deals is long gone and that he has asked Vice President Vance to focus all his energy on the massive corruption and crime taking place in Democrat-run cities and states across the United States. Just yesterday he had said he authorized Vance to handle negotiations and was considering direct talks with Iran's hardliners to push for an end to the war.
This shift in attitude means meaningful progress in U.S.-Iran negotiations is unlikely in the near term. In fact, earlier this week U.S. Secretary of State Rubio had already expressed that rather than resuming war with Iran or reaching a deal, President Trump prefers a third option: continuously squeezing the economic lifeline of the Iranian regime, making Iran pay a heavy price, making it increasingly difficult to "fund terrorist organizations" and to rebuild its military — and this pressure has no end date.
Iran, which had earlier submitted a proposal and awaited a response, claimed it had "kicked the ball to the U.S. side, and they must make a decision and announce it." Now the ball is back with Iran. Clearly the U.S. does not agree with Iran's proposal — no change means no talks.
So facing the U.S. strategy of tightening the blockade to try to cripple Iran's economy, the next thing to watch is how Iran, which has expressed determination to end the "no war, no peace" state, will respond.
Interestingly, this time Iran did not immediately respond forcefully to Trump's remarks. Iran's Foreign Ministry only said that participating in military action against Iran would be considered a hostile act. Separately, Iran's Assembly of Experts issued a statement calling on relevant authorities to review withdrawing from the Nuclear Non-Proliferation Treaty, re-examine the national defense strategy and build the necessary deterrent capability.
Instead, in the early hours, Yemen's Houthi armed group issued a statement claiming it carried out two military operations against Saudi oil facilities that day, including attacks on a pump station of Saudi Arabia's east-west oil pipeline and the Yanbu oil facility. Whether there was actual damage awaits Saudi response. The Houthis have repeatedly claimed to have struck Saudi oil facilities before but produced no substantive impact. In October, Saudi crude production hit a post-Iran-war high of 10.56 million barrels per day.
Due to setbacks in negotiations, geopolitical maneuvering will continue, and geopolitical risk premium has returned to the market. The intensity currently appears relatively controllable, but this brings uncertainty to future oil prices. If Iran responds forcefully later, more geopolitical premium is expected to be priced in.
On the supply-demand side, the U.S. market has begun to build inventories. The EIA report showed that U.S. commercial crude inventories rose by 4.657 million barrels in the week to November 6, far exceeding expectations of a 1.109 million barrel decline. U.S. domestic crude production rose by 10,000 barrels to 14.013 million barrels per day that week, rising to a record high for a third consecutive week. In addition, the physical market continued its weak tone, and recent OPEC monthly reports all showed that tight supply conditions have clearly eased, making it difficult for supply-demand fundamentals to provide upward drivers for oil prices.
The repair rally in oil prices continued with Trump's remarks. After negotiations became difficult to advance and a deal became hard to reach, some geopolitical premium returned to the market. But based on the current situation, the possibility of continuously accumulating to the more than $20 geopolitical premium seen in October is very small. In the short term, oil prices are expected to still have upward spikes, and investors can seize opportunities to sell on rallies after pricing is relatively full, paying attention to rhythm and participating cautiously.
Daily Updates
[1] WTI front-month crude futures rose $2.21, or 2.55%, to $88.74 per barrel; Brent front-month crude futures rose $3.06, or 3.3%, to $95.82 per barrel; INE crude futures rose 1.65% to 617.9 yuan.
[2] The dollar index rose 0.25% to 103.17; the Hong Kong Exchange's USD/CNY rose 0.02% to 6.6535; U.S. 10-year Treasury notes fell 0% to 106.08; the Dow Jones Industrial Average fell 0.36% to 52,297.09.
Recent News
[1] Cui Dongshu: New energy penetration rate exceeded 50% across all vehicle class markets in October. Cui Dongshu of the China Passenger Car Association said new energy penetration is highest at both the high and low ends, and lowest in the A segment. In October, new energy penetration exceeded 50% across all vehicle class markets. Recently, the highest new energy penetration is in small cars: in October, mini vehicles reached 100% new energy penetration, A0-segment small cars reached 91%, C-segment cars reached 73%, B-segment reached 69%, and the A segment improved well, reaching 50% penetration in October. China's car ownership is only 254 units per thousand people, and vehicle consumption penetration is the most important future trend. The low cost of electrification driving continuous price declines is a trend. Currently, after the vehicle purchase tax exemption policy exits and new energy vehicle exemption technical indicators are upgraded, some short-range models have been forced to raise prices. In 2026, the sharp shrinkage of A00-class electric vehicles will bring an increase in average prices, raising the threshold for car purchases, reducing the size of the group that can buy, and putting greater pressure on sales growth in 2026. On November 11, the China Association of Automobile Manufacturers released data showing that China's new energy heavy truck single-month penetration rate exceeded 50%, marking that the heavy truck industry, which previously had high energy consumption as its main shortcoming, has entered a new stage of electrification development. Since the beginning of this year, China's new energy heavy truck products have continuously made breakthroughs and improvements in R&D, infrastructure, and technical validation, and a new generation of heavy truck models has entered mass production, with full-load range reaching 500 kilometers.
[2] Middle East crude premiums fell, and concerns about supply recovery increased. (1) Institutional reports said spot premiums for Middle East crude benchmarks Oman and Dubai fell on Thursday to near four-month lows, as data showing regional production recovery raised oversupply concerns. (2) OPEC+ crude production rose in October, driven by higher Saudi output, although shipping through the Strait of Hormuz remains disrupted. (3) Meanwhile, lower freight rates made oil from other regions cheaper, diverting some demand. Traders said independent refiners snapped up millions of barrels of Brazilian crude in recent trading, as lower freight rates improved economics and refiners sought to use up annual import quotas before year-end. (4) The spot Dubai premium to swaps fell 48 cents to 8 cents per barrel. (5) Asian buyers have been snapping up Atlantic Basin crude at lower prices, after tanker freight rates for cargoes from Africa and Brazil fell sharply from historic highs, according to traders, shipbrokers and analysts. (6) An industry survey published Thursday by Statistics Norway showed Norwegian oil and gas companies cut their projected investment for 2026 while raising their 2027 outlook compared with estimates three months ago. The OPEC monthly report showed member countries' crude production rose by nearly 2 million barrels per day in October to 27.16 million barrels per day, mainly driven by Saudi Arabia, Iraq and Kuwait. Saudi production rose to 9.2 million barrels per day, close to pre-war levels, and Iraq's production approached 4.5 million barrels per day. The agency said regional crude flows are approaching pre-war levels, but exports still rely on alternative routes bypassing the Strait of Hormuz, and supply remains vulnerable to further disruptions. OPEC kept its demand forecast unchanged, expecting global oil demand growth of 200,000 barrels per day this year and 2.6 million barrels per day in 2027. The agency expects volatility to remain high, and the pace of normalization in the Strait of Hormuz remains a key driver of the outlook.
[3] According to ANP data, Brazil's September crude production set another record at 4.7 million barrels per day, up 20% year-on-year and marking the fourth consecutive monthly production record. Seaborne crude/condensate exports in September exceeded expectations, rising 32% year-on-year to 2.8 million barrels per day, slightly below the record 2.9 million barrels per day set in August. This growth is mainly concentrated in Brazil's pre-salt fields. According to ANP data, pre-salt fields accounted for 83% of national oil and fuel production in September, and pre-salt output rose 23% year-on-year, with the Buzios field alone producing 1.2 million barrels of crude. According to ANP's annual reserves report, Brazil's proven oil reserves rose 3.8% in 2025 to 17.5 billion barrels, supporting further FPSO-led growth. As a result, Brazil's export mix is dominated by medium-sweet pre-salt crude, accounting for 85% of crude/condensate exports from January to October, with China taking 46% of these crude exports during the period.
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