Daily note, Thursday 5th November 2026
Spreads say Wednesday's oil flush went too far
Wednesday was the liquidation day: WTI and Brent futures both lost more than 8% after Vance blamed the midterm losses on the war. Today the prompt spreads are rebuilding faster than flat price, so the dip found physical buyers. WTI held $87.1 and is building above Wednesday's $88.8 HVN. Buy the dip into it, first target Wednesday's $90.8 VaL, then the thin volume up to the $95.1 VWAP.
- Crude oil
-
WTI crude USOUSD
Bullish above $87.1
Thu low$87.1Wed HVN$88.8Wed VaL$90.8VWAP$95.1Wed PoC$95.7Tue VaL$96.0Tue PoC$96.4Mon VaL / Wed VaH$97.5$89.7
Buy zone Sell zone Price at 11:51 GMT. Mon VaL, Tue PoC, Tue VaL, Wed VaH, Wed PoC, Wed VaL: single-session profiles. VWAP: this week's. Thu low: this morning's low.
Cracks, spreads, flows
Wednesday was the liquidation day. WTI futures fell 8.3% and Brent 8.7% settlement to settlement. Brent's war premium went fastest. The trigger was Vice-President Vance blaming the Republicans' midterm losses on the war in Iran. The market read that as the White House losing its appetite for more strikes. Tehran's line hasn't moved: talks are authorised, a deal is still "far". The path from talks to a deal is long, and the market priced most of it in one session.
Today the spreads are bouncing harder than flat price. On Wednesday WTI Dec/Jan narrowed by about a quarter and finished nearly half under Friday. Jan/Mar lost about a fifth. This morning both are about 10% wider on Wednesday's settlement, while flat price is up about 1%. Brent is rebuilding faster: Jan/Feb is about 16% wider and Jan/Mar about a fifth wider, after losing about a tenth on Wednesday. Brent Jan/Mar is still nearly a quarter under Friday. Someone is paying up for the prompt barrel at these prices.
The arb snapped back too. The Brent–WTI Jan futures spread lost about 15% on Wednesday and has taken back about 13% today. EIA spot for Tuesday 3rd November has Dated Brent at $7.4 over WTI Cushing, down from $19.7 on 27th October. The arb that was pulling 4.85M b/d of US crude out in the week to 23rd October is shut. Exports fell to 3.68M b/d in the week to 30th October, down 1.18M b/d.
Diesel is still the tight barrel. Futures diesel cracks lost about 6% on Wednesday and are up about 2% today. Gasoline cracks are flat on both days. EIA spot for 3rd November: Gulf Coast diesel crack $90.4, gasoline $22.3, 3-2-1 $45.0 (from $50.2 on 27th October). Distillate stocks drew 3.6M bbl to 99.3M bbl, 13.3% under the 5-year average. Gasoline is the soft end of the barrel on both sides of the Atlantic.
EIA, week to 30th October. Commercial crude 409.8M bbl (−0.9M), 4.3% under the 5-year average. Cushing 27.3M bbl (+0.3M), 9.2% over it. Gasoline 209.0M bbl (−0.2M). SPR 282.2M bbl (−0.4M). Lower exports and a Cushing build: that's the WTI prompt spread's problem, and it's why Brent's curve is bouncing harder than WTI's.
Funds. Managed money was net long 31,128 WTI contracts on 27th October. Friday's report covers Monday to Tuesday. Wednesday's flush shows up next week. (Charts.)
The read: the war premium came out on Wednesday, and today's spread bounce says the physical market thinks Wednesday went too far. Flat price is lagging the curve, and that's the trade. Buy dips while the spreads keep rebuilding. Above $90.8, Wednesday's thin volume gets filled fast.
The auction
Monday's VaL at $97.5 capped Tuesday. Tuesday built value at $96.0–98.3, PoC $96.4. Wednesday's session opened inside it, built its PoC at $95.7, then broke. Wednesday's value runs $90.8–97.5. It's that wide because it's a trend day.
The break went vertical in the London afternoon: from about $94.4 to $88.0 in two hours, leaving thin volume from about $89.5 to $93.5. Wednesday's late trade built a small HVN at about $88.8. This morning's low is $87.1, set early in Asia. Since then price has walked back up. At 11:51 GMT WTI is $89.7, under Wednesday's $90.8 VaL. This week's VWAP is at $95.1.
Asia found the low and London is building above the $88.8 HVN. Higher lows since $87.1. Back above $90.8 is back inside Wednesday's value, with thin volume up to $93.5 and the $95.1–95.7 VWAP and PoC above it. Under $87.1 and the bounce is done.
WTI levels and setups
Long above $87.1. Buy $88.5–89.0. Stop $86.8. Targets $90.8, then $95.1.
Buy setup Wednesday HVN dip
- Buy zone
- $88.5 – $89.0 Wednesday's late HVN, from above
- Stop-loss
- $86.8 Under this morning's $87.1 low
- Targets
- $90.8 / $95.1 Wednesday's VaL, then this week's VWAP through the thin volume
Invalidation: Hourly acceptance under $88.5 puts price back on this morning's $87.1 low. The long is off under $86.8. Spreads giving back today's bounce, or a signed framework out of Doha, does the same.
| Level | What it is | Role today |
|---|---|---|
| $97.5 | Monday's VaL, Wednesday's VaH | Top of Wednesday's value |
| $96.4 | Tuesday's PoC | Resistance |
| $96.0 | Tuesday's VaL | Resistance |
| $95.7 | Wednesday's PoC | Upside magnet above $90.8 |
| $95.1 | VWAP (this week) | Second target |
| $90.8 | Wednesday's VaL | First target |
| $89.7 | Price | Above the HVN |
| $88.8 | Wednesday's late HVN | Pivot; buy zone |
| $87.1 | This morning's low | Support |
| $86.8 | Under this morning's low | Stop |
Today's calendar (London time)
- Friday 13:30: US payrolls.
- Friday 20:30: CFTC Commitments of Traders, positions to Tuesday 3rd November.
- Sunday: weekly outlook for 9th–13th November.
Cracks and Dated Brent–WTI are calculated from EIA daily spot prices against WTI Cushing (latest published: Tuesday 3rd November). Timespreads and futures cracks are described from futures prices against Wednesday's settlement, not quoted. Prices are taken from a CFD feed (USOUSD) and can differ from futures prices and from your broker's quotes.