Will we see a market breakout?
November 7, 2025
In yesterday’s trading, crude was a little softer, and the products had a nice pop higher. The increase in prices yesterday and the continued rise in today’s trading appear to be the market’s follow-through on the inventory reports, which showed draws in the products. RBOB and ULSD are back testing near the top of their respective trading ranges, and the market must ask again whether we will finally see a breakout. This is a big question, and there are still plenty of negative headwinds, which are not supportive of higher prices.
There is the state of the US economy, and for that matter, the global economy. Inflation, where it is headed, and what the Fed will do to rates. The government is still shut down, with many workers furloughed. The outlook for many of the big investment banks is that the global oil market will be oversupplied in Q4 of 2025 and 1Q of 2026. These are not supportive factors for higher prices.
JPMorgan estimates oil demand will grow by 850,000 bpd through November 4,well below its original estimate of 900,000 bpd. Also bearish for oil prices was the news that Saudi Arabia cut its December 2025 oil price for Asia.
Russia’s Finance Ministry data showed that the country’s oil and gas revenue fell by almost 27% in October to 888.6 billion rubles, or $10.93 billion, from the same month a year earlier, amid weak oil prices and a strengthening ruble.
Energy prices are also supported by the recent attack on Russian largest refinery which has caused supply concerns in Europe and the region is now calling on more barrels to fill any void. Despite inventory levels being at the low end here in the US we are exporting barrels. S&P Global Commodities at Sea showed that diesel and gasoline exports out of the Gulf to Europe are at a new all-time high in October reaching 1.7 million metric tons, besting the prior record of 1.6 million metric tons back in August 2024. This news could offer support to diesel prices.