Crude Oil Futures Slide a Third Day; Gold Near $4,100

Item	Level, Oct. 6
WTI and Brent futures	Each down nearly 1%, third straight decline
Aramco Arab Light to Asia (Nov.)	$5/bbl discount to Dubai/Oman, cut by $3
G7 stock release	100 million barrels over four months
Spot gold	$4,104, lowest since Aug. 5
December gold futures	$4,133
10-year Treasury yield	About 5.31%
Silver	About $61, support $60.50, resistance $63.40

Crude oil futures fell for a third straight session on Tuesday even as the risk of a wider regional conflict rose, while gold slid to its lowest level in two months as Treasury yields stayed elevated.

Crude oil futures: supply recovers, war risk lingers

WTI and Brent each lost nearly 1%. XS.com’s Samer Hasn attributed the decline to a recovery in Middle East crude supply to pre-war levels. Kpler data cited by the Wall Street Journal showed about 164 million barrels exported in the week of September 21 to 27, including more than 73 million through the Strait of Hormuz, and Hormuz flows have reached 76% of pre-war levels. The G7 also plans to release 100 million barrels of diesel and crude over four months, with the diesel front-loaded into the first 20 days. Saxo Bank’s Ole Hansen said stock releases could give temporary relief into the peak demand period, but that a sustained move lower in Brent requires broader normalisation of refinery output and trade flows.

The risks pull the other way. Yemeni government forces have rolled back Houthi gains near the Bab el Mandeb Strait, and the Houthis responded by targeting airports, military bases and a refinery in Rabigh, Saudi Arabia. Saudi Arabia activated the Mecca Defense Agreement, which will bring Turkish and Pakistani forces onto its territory. Iranian floating storage outside Hormuz is nearing depletion, which under the US naval blockade could cut Iranian exports to zero. Hasn argued that because these fronts are linked, the risk premium in crude prices could stay high for an extended period.

Aramco prices split by region

Saudi Aramco’s November official selling prices diverged. It cut Arab Light to Asia by $3 a barrel to a $5 discount to the Dubai/Oman benchmark, the lowest level since June 2020, and raised all grades to Europe by $3. US prices were unchanged. The Asian cut is likely a response to higher shipping costs on the Hormuz route, since Saudi Arabia is using ship-to-ship transfers in the Gulf of Oman to reduce the risk of Iranian attacks. Supertanker rates hit a record $1.3 million a day, per Poten & Partners, and freight now makes up about 27% of delivered VLCC cargo cost against 3% in January. Analysts had expected Asian prices to rise.

Fuel markets stay tight

Fuel markets remain constrained despite the crude recovery. Russia extended its ban on diesel, marine fuel and gasoil exports until October 31, and China had not authorized fuel exports beyond Hong Kong and Macau before Golden Week. Middle distillate cracks fell sharply at the end of last week. One analysis argued fuel markets could stay in deficit well into 2027 if supplies from the Middle East, Russia and China remain limited.

Gold futures: yields hold the line

Spot gold fell to $4,104 early in the European session, its lowest since August 5, and December futures to $4,133. The 10-year yield held near 5.31%, with the Fed Board’s Kim-Wright model putting the 10-year term premium at about 1.02% on September 25. Higher expectations for a December rate hike could push the 10-year yield higher, and oil-driven inflation worries could add to pressure on gold. Support is the $4,100 level, then $4,080 and $4,060 from early August; a hold above it points to a rebound toward $4,200.

Silver below its mean

Silver closed at $61.026 on October 5, below its daily mean of $61.45 and weekly mean of $61.69. Immediate support is $60.50, then $59.70. Resistance sits at $62.25 and $63.20 on the daily chart, with $63.40 and $66.37 weekly. The Silver Institute’s April outlook projected a sixth straight annual deficit of 46.3 million ounces. These are one analyst’s technical levels, not forecasts.