European Session Crude Oil Report — 26 Oct 2026

Crude oil markets edge cautiously higher in European trading as Brent tests the $103 handle while WTI struggles to hold above $90, with the Brent-WTI spread widening to $12.16 as European refiners face tighter North Sea supply. The complex builds on Brent’s modest 0.75% overnight gains from Asia where Shanghai crude futures found support at technical levels, though WTI remains pressured by its oversold RSI at 22.5 against weakening US physical market indicators. The term structure steepens its backwardation with Brent’s front-to-Jul27 spread now at -14.6%, signaling persistent near-term tightness despite recession fears.

Technicals paint a divergent picture as Brent holds above its EMA21 at $101.63 (+1.4%) while WTI trades $2 below its equivalent average at $92.90. The RSI divergence is stark - Brent’s 38.9 reading suggests room for recovery versus WTI’s capitulation-level 22.5. Key pivot points loom at $89.46 for WTI (current $90.86) and $96.17 for Brent ($103.02), with the latter’s upside testing the first resistance at $117.04. The Brent-WTI spread widens to its highest since June as European crude differentials firm on disrupted North Sea loadings, forcing regional refiners to absorb higher transport costs for US barrels.

Geopolitical tensions keep Hormuz risk premiums elevated with IRGC naval activity disrupting tanker movements, while Houthi threats in Bab-el-Mandeb divert VLCCs around Africa - adding $1.50/bbl to freight costs. OPEC+ discipline remains firm with the group maintaining 0.6 mb/d deficit against call, though Russian Urals discounts deepen to $18/bbl under Brent as EU sanctions tighten. US crude stocks hover near operational minimums with Cushing at 24.3 mb and SPR draws slowing at 39.7% capacity, though refinery runs at 92.5% suggest demand resilience.

The backwardation steepens notably in Brent as prompt barrels command premium amid supply concerns, with Oct26 at $101.80 versus Jul27 at $86.89. WTI’s curve shows similar but less pronounced stress at -10.8% for same period. This structure pressures shorts as prompt cover becomes costly, particularly for European players facing Brent’s steeper contango. US production stabilizes at 13.95 mb/d but faces pipeline constraints in Permian, limiting WTI’s upside.

Session focus turns to the NYMEX open with traders watching whether WTI can defend $90 as Brent tests $103 resistance. The spread dynamics favor Brent amid Atlantic basin tightness, though recession fears linger with both contracts down ~4% weekly. Key levels to watch are WTI’s PP at $89.46 and Brent’s S1 at $82.16 - a break below could accelerate selling. For now, the market balances geopolitical risk against macroeconomic headwinds, with backwardation and Middle East tensions providing floor under prices.