Brent falls below $90 and pressures Mexico's export blend

Brent fell almost 3% to $89.66 per barrel on Tuesday, November 10, its lowest level since August 31. The trigger was Donald Trump, who said he does not consider new military action against Iran necessary for now, according to The Guardian.

The drop followed a decline of almost 6% on Monday and a 17% retreat over the week, the steepest weekly fall since the weeks of the COVID-19 pandemic in 2020, according to OilPrice. Against the peak of more than $117 in late October, Brent is down close to 25%, according to Ole Hansen, head of commodity strategy at Saxo Bank, cited by that outlet. West Texas Intermediate (WTI), the U.S. benchmark, was trading at $84.78, down 2.4%, according to CNBC. For Mexico the Brent level matters because the Mexican export blend is priced against international benchmarks: a lower Brent feeds through to the price Pemex reports each month and to the value of the export basket that underpins oil revenue in the federal budget.

Analysts also cited the recovery of crude flows through the Strait of Hormuz and expectations that Iran will soften its stance on control of that route, according to CNBC. ING's commodities strategist noted that the market continues to unwind part of the geopolitical risk premium. In Europe, the Stoxx 600 rose 0.9% and airlines advanced on the prospect of lower fuel costs, while BP and Shell led losses on the FTSE 100, according to The Guardian.

On the other side, Houthi attacks on Saudi energy infrastructure did not stop: a Saudi Energy Ministry official reported a limited-scale fire on the East-West pipeline, now extinguished, according to OilPrice. Diesel, gasoline and jet fuel prices remain under pressure from scarce refining capacity, according to CNBC.

The market is awaiting October inflation data in the United States, due the same Tuesday, and any signal from Washington and Tehran about a deal. In Mexico, the figure to watch is the export blend price Pemex reports for November, which will show how much of the international pullback reaches the value of the basket.

This article was written with the assistance of artificial intelligence from verified sources and reviewed by a human editor before publication.