Brent crude oil surged to $108.42 last night—can it break its previous high of $119.50 in the near term? And can it return to pre-war levels below $70?

Dual supply constraints, inventory drawdowns in low-price zones—these points have been analyzed repeatedly over the past 3–6 months. Attempting to suppress physical fundamentals via financial instruments is widely recognized as unsustainable. At a certain level of interstate rivalry, money matters—but it’s not always decisive. The higher a government’s debt and leverage, the more constrained its policy space becomes. Credit, after all, rests on trust—without credibility, credit cannot function. Though shale oil theoretically takes 6–9 months to ramp up (and even 3–5 months for individual wells), it remains highly capital-intensive; in practice, reaching peak output typically requires over a year. In past oil price surges, the industry could immediately frack ‘drilled but uncompleted wells’ (DUCs)—hence the 6–9 month timeline. Today, however, DUC inventories have fallen to their lowest level since data began in 2013, exhausting this buffer. New wells must now be drilled from scratch. Yet drilling rig counts show no significant increase. Historically, a notable rise in rigs leads to initial production gains roughly six months later, with peak output arriving 12–18 months afterward. The Permian Basin’s core area has been developed for over a decade; Tier-1 blocks are dwindling, while Tier-2 blocks feature far higher breakeven costs—and face additional challenges including gas-oil ratios and limited pipeline infrastructure. Short-term shocks may even trigger negative natural gas prices, forcing flaring on-site—a practice increasingly restricted by environmental regulations.

How should we assess the statement: 'Geopolitical factors intensifying, U.S. crude futures post largest weekly decline in two months'?

OPEC released its November 'Monthly Oil Market Report', which slightly lowered its global oil demand forecast for this year while raising its forecast for next year. It projects that global daily oil demand growth will be only 200,000 barrels this year, rising to 2.6 million barrels per day in 2027—lifting average global daily demand from 105.7 million barrels in 2026 to 108.3 million barrels in 2027. Of this, OECD countries’ daily oil demand is expected to rise by approximately 500,000 barrels, while non-OECD countries’ demand growth will reach about 2 million barrels per day. Regarding inventories, OPEC expects stockpiles to rebound as refineries, traders, and governments replenish oil stocks depleted during the Iran conflict—supporting demand growth next year. As of August, OECD commercial oil inventories stood 177.2 million barrels below the 2015–2019 average: commercial crude inventories were 96.8 million barrels below average, and refined product inventories 80.4 million barrels below. On supply, non-OPEC+ output is projected to lag behind demand growth. OPEC forecasts that non-cooperative producers’ liquid petroleum output will rise by only 600,000 barrels per day in 2027, while OPEC+ members’ contributions—including natural gas liquids and other unconventional sources—will add roughly 100,000 barrels per day. Consequently, OPEC+ crude will shoulder greater responsibility: global daily demand for OPEC+ crude is projected to climb from 42.1 million barrels this year to 43.9 million barrels in 2027—an increase of 1.8 million barrels per day. Chapter III: Crude Oil Market Supply-Demand Dynamics U.S. Crude Oil Inventories Decline Net Long Positions Decline U.S. Oil Rig Count Rises U.S. energy firms’ active oil and gas drilling rigs rose to their highest level since May 2024. According to Baker Hughes, a GE oilfield services company, the number of U.S. active oil-directed rigs stood at 462 for the week ending October 9—up 6 from the prior week and 44 above year-ago levels. The report noted: one rig lost in the Cana-Woodford Basin; one added in the Haynesville Basin; four added in the Permian Basin; offshore rigs totaled 12—up 2 from the prior week but down 3 year-on-year. Baker Hughes data also showed 132 active natural gas rigs—down 1 week-on-week but up 12 year-on-year. Total U.S. land-based oil and gas rigs reached 590—up 4 week-on-week and 61 year-on-year. Overall U.S. oil and gas rigs totaled 603—up 5 week-on-week and 56 year-on-year. Mainstream Institutions’ Crude Oil Supply-Demand Forecasts Chapter IV: Crude Futures Market Outlook Market Outlook for Next Week This week (October 8–14), renewed volatility in Middle East geopolitics heightened market caution, while extreme weather reduced U.S. oil supply—propelling international oil prices upward amid overall volatile gains. As of October 14, WTI crude futures settled at $95.09 per barrel—up $6.81 (7.71%) from the recent low of $88.28 per barrel on October 7.

Diamondback Sees 10% More Permian Oil Rigs by Year-End as War Boosts Prices

May 5, 2026

Diamondback Energy forecasts a 10% rise in Permian oil rigs by year-end amid soaring crude prices driven by regional conflict. CEO Kaes Van't Hof highlights depleted global inventories and the US role as a last-resort supplier as catalysts for production growth.

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Diamondback Sees 10% More Permian Oil Rigs by Year-End as War Boosts Prices

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