Brent traded around $91 a barrel and WTI around $85 a barrel as traders continued to assess efforts to de-escalate the Iran war and restore Middle East energy flows. The good news is that US gasoline prices have dipped below the politically sensitive $4-a-gallon level, just weeks before one of the year's busiest travel periods: Thanksgiving.
Let's begin with overnight diplomatic signaling. President Trump said Monday that further strikes would be unnecessary, though US forces remain "locked and loaded," adding, "Iran, militarily, is effectively over. We're just keeping it at the status quo, and we're doing that really at the behest of countries that are their neighbors."
Trump's comments came shortly after his conversation with Qatar's Prime Minister and Minister of Foreign Affairs Sheik Mohammed bin Abdulrahman bin Jassim Al-Thani.
Eurasia Group analysts Gregory Brew and Clayton Allen told clients on Monday that "the political window for escalation has closed." They lowered their odds of further escalation in the Gulf region to 30% from 60%.
The analysts said the revision was "based on evidence of increasing political constraints on Trump following last week's midterm elections and the mounting opposition from inside the administration and the Republicans" to another round of all-out hostilities.
Plummeting oil prices have pushed pump prices lower in recent weeks. According to AAA, the national average for regular gasoline dipped below $4 a gallon.
AAA Gas
AAA Diesel
This comes just over two weeks before Thanksgiving, one of the year's busiest travel periods of the year. AAA has not yet released its forecast for this season, but last year it projected that around 82 million Americans would travel, including 73 million by car.
One of the strongest indicators of easing fuel-market tightness is the narrowing of gasoline and diesel crack spreads.
This potentially paves the way for further relief at the pump as crude oil prices continue to retreat, offering welcome savings for consumers... just a little too late for the Republicans.