Physical Oil Market Surges Past $120 as Futures Lag Behind Tightening Supply
A sharp divergence has emerged between physical and futures oil markets, with Dated Brent exceeding $120 per barrel while ICE Brent trades near $101. This gap signals severe physical tightness driven by a European diesel stock release, China’s reinstated fuel export ban, and ongoing disruptions in the Strait of Hormuz. OPEC+ is expected to maintain November output quotas, while the US Department of Energy offers the final tranche of its emergency strategic reserve drawdown. Global fuel subsidies are projected to surpass $1 trillion as governments struggle to manage rising energy costs and supply constraints.