Will WTI Crude Oil (WTI) hit (LOW) $85 in October?

Analysis

November WTI settled at $101.41 on Friday, October 16, up $3.44, or 3.5%, and its highest settlement since September 17. That leaves the contract about $16 above the $85 level it would need to touch before the end of October. The push higher has a clear cause. Reports indicate attacks around the Strait of Hormuz surged over the past 10 days, and intensified Iranian attacks drove Gulf crude flows sharply lower. One weekly review put the gain in November WTI at 8.2% over five sessions, from $93.74 to $101.41. Be careful with the weekly figures, because they come from different sources and measures. Another report put WTI's weekly gain at 10.4%, while a Friday-morning report cited 5.81%. There are offsets. The International Energy Agency agreed to release more than 20 million barrels of fuel, and the US Department of Energy issued a request for proposal to exchange up to 17 million barrels from the Strategic Petroleum Reserve. A separate report said Trump is mulling easing restrictions on sanction-facing nations. None of that has yet pulled prices anywhere near $85. Time also matters. About nine trading sessions remain, and a simple volatility model using daily moves of $3.36 put the chance of a fall that deep at around 10%. That is enough to keep a drop possible, but the lean stays against it. Watch whether the supply releases and any sanctions easing can cut the Hormuz risk premium. A steep slide from $101 would be the first sign this view is wrong.