In October, crude oil futures rose by 2.5%, recovering from a fourth-year trough below $57/bbl, showing the biggest weekly jump since June. The rally was fueled by new U.S. sanctions on Russian oil exports (Lukoil the target over Ukraine tensions), surprise inventory draws in U.S. As per EIA, a 4M barrel drop vs 3M expected, EIA showed a massive 6.974M barrel draw and eased tensions in U.S.-China trade relations. Trump’s Asia trip cut tariffs on Chinese imports from 57% to 47%, re-started soybean purchases and suspended Beijing’s rare-earth export restrictions. Agreements with Japan, South Korea and Southeast Asia improved growth prospects in the top two economies (accounting for more than 40% of global oil demand), alleviating concerns about a slowdown and supporting demand sentiment. Following OPEC+’s sign off to a modest 137,000 bpd December increase with a freeze in Q1 2026, sanctions, inventory tightness, and trade optimism more than compensated for oversupply concerns, leading WTI higher.
