Brent Settles at $109.86, $4.86 Above the EIA's $105 Fourth-Quarter Forecast

ICE Brent December futures settled at $109.86 per barrel on Friday, Oct. 16, up $3.94 or 3.7% on the day and 4.9% on the week, according to ICE settlement data. The settlement sits $4.86 above the U.S. Energy Information Administration's forecast of a $105 Brent average for the fourth quarter, published on Oct. 6.

Brent December Gains $5.14 in the Week to Oct. 16

The December contract settled at $104.72 on Oct. 9 and moved through $106.65 on Oct. 12, $105.69 on Oct. 13, $106.06 on Oct. 14 and $105.92 on Oct. 15 before Friday's gain. The Oct. 16 settlement was the contract's highest in ICE data going back to November 2024. January Brent settled at $106.82, leaving December $3.04 above January.

The physical market moved the other way on Friday. The EIA's Europe Brent spot price fell to $119.33 from $126.35, narrowing its premium over December futures to $9.47 from $20.43. The spot premium had held above $20 for four sessions from Oct. 12, a sign that prompt physical barrels were tighter than the futures curve.

Cushing WTI Spot Rises $13.22 in Five Sessions

The EIA's WTI spot price at Cushing, Oklahoma, was $108.21 on Oct. 16, up from $94.99 on Oct. 12, a gain of $13.22. Alberta Treasury Board and Finance reported front-month WTI futures at US$97.97 on Oct. 15, up US$6.48 on the week. The Brent-WTI spot spread fell to $11.12 on Oct. 16 from $34.96 on Oct. 12, Oil Authority calculations from EIA data.

EIA Reports an 8.56 Million Barrel U.S. Crude Draw

U.S. commercial crude inventories fell 8.56 million barrels to 415.58 million in the week ended Oct. 9, the EIA's Weekly Petroleum Status Report showed. Domestic production fell 300,000 barrels per day to 13.68 million, while crude exports were 4.57 million barrels per day. Distillate stocks fell 2.53 million barrels to 102.61 million.

EIA Forecasts Brent at $105 in Q4 and $87 by Mid-2027

The EIA's October Short-Term Energy Outlook forecasts Brent spot at $105 per barrel in the fourth quarter of 2026, $14 higher than in its September outlook, and $96 for 2026 as a whole. It expects prices to fall to $87 by the second quarter of 2027 and $74 by the fourth quarter of 2027, for a 2027 average of $84, as bypass routes and new pipeline capacity reduce Middle East shut-ins.

Against Friday's settlement, the EIA's fourth-quarter average implies a decline of $4.86, or 4.4%, and its mid-2027 forecast a decline of $22.86, or 20.8%, Oil Authority calculations. The EIA's figures are spot price averages and the settlement is a futures price, so the comparison shows direction rather than a precise gap.

EIA Expects Inventories to Keep Falling in Q4

The EIA estimates global oil inventories fell 1.9 million barrels per day in the third quarter and will fall another 0.7 million barrels per day in the fourth. It assumes shut-ins average about 4.5 million barrels per day this quarter. The International Energy Agency said in its Oct. 14 Oil Market Report that global on-land oil stocks were at their lowest since at least 2016.

Saudi-Led Coalition Reports Yanbu Missile Intercept

The Saudi-led coalition said on Oct. 16 that it intercepted a ballistic missile launched toward Yanbu, the Red Sea outlet of the East-West pipeline, as covered in our Yanbu report. UK Maritime Trade Operations reported two tankers attacked northeast of Al Jubayl, Saudi Arabia, the same day.

Alberta's WCS Discount at US$24.96

Alberta reported the WTI-WCS differential at US$24.96 on Oct. 15, implying Western Canada Select near US$73.01. Canadian heavy barrels capture only part of the rally in global benchmarks while the discount stays near US$25. Our Oct. 12 forecast report compared other outlooks.

EIA Weekly Report on Oct. 21 and Baker Hughes Count on Oct. 23

The EIA's next weekly petroleum report is due on Oct. 21. Baker Hughes publishes its rig count on Oct. 23, and our latest rig count report showed 603 U.S. rigs.