Brent on Track for Largest Weekly Decline Since April 2020

Brent crude futures were on track for their largest weekly decline since April 2020 as hopes that a Democratic sweep could help end the U.S.-Iran conflict unwound some of the premium tied to conflict risk.

The decline topped $20 over the week. UBS energy expert Dominic Ellis estimated that crude near $95 still carried $10 to $15 in risk premium.

Ellis questioned whether the United States was ready to make the major concessions he viewed as necessary to advance talks. He also cautioned that markets had priced in de-escalation ahead of supporting evidence over the past seven months and might be doing so again.

Ellis estimated the conflict had drained nearly 700 million barrels from global inventories. If it continues, he said, inventories could fall by at least 40 million to 50 million barrels a month.

The move follows earlier coverage of a week when Brent was on course for gains amid renewed missile launches targeting Saudi Arabia and concern over regional supply security.