Brent Slips Below $90 as OPEC Output Rebounds and Surplus Builds

Brent crude settled below $90/bbl on Tuesday, Nov. 10 — its weakest level since late August — capping a retreat of nearly 24% from the $118/bbl intraday high it touched on Oct. 30.

The number tells the story of a market repricing risk in a hurry. Two weeks ago, traders were paying up for the chance that Middle Eastern supply could go offline. Now they're weighing a surplus instead.

How much supply came back?

OPEC crude production rose by 1.38 million b/d in October to 22.87 million b/d, according to a Reuters survey. Saudi Arabia, Kuwait and Iraq led the gains, and output among the 11 producers surveyed has recovered to roughly 90% of February's prewar level.

Exports have been slower to follow. Preliminary data from Kpler showed crude and condensate shipments through the Strait of Hormuz, the Red Sea, and the Gulf of Oman averaging about 16.1 million b/d in October, down from 17.09 million b/d in September. Kpler cautioned that the October figure could be revised upward as more shipment data lands.

US West Texas Intermediate futures also recorded losses in Tuesday's session, tracking Brent lower.

The takeaway: barrels are coming back faster than the waterways can carry them.

Is the market now in surplus?

JPMorgan thinks so. The bank estimated the global oil balance flipped into a surplus of 1.1 million b/d in September, widening to 1.4 million b/d in October.

It attributed the swing to three forces: recovering Middle Eastern exports, additional supply from other producing regions, and weaker consumption after months of elevated energy prices. Demand destruction, in other words, is no longer a threat — it's showing up in the balance.

Analysts' surplus estimates are just that: estimates. But the direction of travel matters more than the decimal, and it points to looser fundamentals just as the geopolitical premium deflates.

Why did geopolitics stop lifting prices?

US President Donald Trump said Monday that further military strikes against Iran were unlikely in the near term, following appeals from regional leaders. After meeting Qatar's prime minister at the White House, Trump suggested the conflict could end "fairly soon," though he indicated the US naval blockade would remain in place.

The prospect of de-escalation has cut the immediate risk of further supply interruptions. Traders read the remarks as reason to keep selling, and the risk premium that had supported prices near $118 continued to drain away.

One caution flag remains planted in the water: attacks on commercial vessels near the Strait of Hormuz continue, and the regional outlook stays uncertain even as the war premium fades.

What to watch next

The watch items are the Kpler revisions to October export flows, the durability of the Strait of Hormuz ceasefire-adjacent calm, and whether JPMorgan's 1.4 million b/d surplus estimate widens or narrows in November.

The market that spent the autumn pricing scarcity is now pricing abundance — and the margin for error is on the downside.