Brent Crude Rebound Past $105 Erases August Slide to $85

A brief window of cheap oil

In late August, two of the biggest forces in markets seemed to line up. Oil was falling fast, and investors were waiting on Nvidia, the clearest test of whether the AI spending boom was still on track. On the morning of August 26, Brent crude futures traded near $85 a barrel. Traders were hoping tanker traffic through the Strait of Hormuz could restart and that the risk of a wider war was fading.21 Brent had fallen more than 9% that week, about $10 a barrel in three sessions. Middle Eastern leaders had met, although mediators said the talks produced no major breakthrough.22

Cheaper oil helped other markets. Lower energy prices eased inflation worries, which supported government bonds. U.S. stocks recovered some of their losses the day before, led by the Nasdaq 100 and a rebound in chip stocks.21 Reuters, as quoted in Yahoo Finance's live coverage, reported that Brent had fallen for a third straight session, down more than 2% to $86.41. The Strait of Hormuz carried about a fifth of the world's traded oil before the war.28

The charts were not clearly bullish, though. XTB said Brent had reached its 200-session exponential moving average for the first time since mid-June. The firm also pointed to a double top near $93.50–$94 and said that if $85 failed to hold, the next support sat around $78–$80.21 That bearish case never played out. Seven weeks later, Brent is above $100 again. That reversal is the main story here, and it changes how the AI energy question looks.

Nvidia delivered; oil did not cooperate

Nvidia reported after the bell on August 26 and beat expectations. It gave a strong outlook, and CEO Jensen Huang defended the company's investments, saying his only regret was not investing more and sooner.28 The next day the stock rose 8.7%. The company's forecast implies revenue growth of 70% in fiscal 2028, far above the 44% analysts surveyed by LSEG had expected, and second-quarter revenue more than doubled.23 Yahoo Finance data puts fiscal second-quarter revenue at about $96.2 billion.27

The market reaction stood out because it broke a pattern. Going into the report, Nvidia stock had fallen after six of its previous eight earnings reports, including the last four. It had also dropped in eight of its last nine sessions before the release.2823 Earlier that week, chip stocks sold off on reports that Nvidia would raise AI server prices by more than 15% because memory costs were climbing.29

Oil kept falling for a while. By August 27, October Brent was down to $87.29 as Oman and Iran held talks over the strait.23 Then the conflict picked up again. The Guardian reported that oil went back above $100 on September 9 for the first time since July. By mid-September, U.S. borrowing costs had reached 5% amid a bond sell-off driven by inflation fears.7

Where crude stands now

The current numbers are well above August's. On October 12, Brent settled up $1.93 at $106.65, its highest close since September 15, and WTI ended at $93.74. Attacks on Saudi Arabia and on tankers near Oman and in Hormuz outweighed Washington's announcements of Russian diesel supplies and an energy ceasefire between Russia and Ukraine.9 CNBC reported that nine tankers were attacked in and around Hormuz in a single week. Kpler data showed about 9.5 million barrels a day leaving the strait, roughly 30% below prewar levels.1

The coverage disagrees on an important point: how much oil is actually flowing. Kpler estimates that non-Iranian Middle East crude and condensate exports averaged at least 16.5 million barrels a day in September, roughly back to prewar levels, with pipelines and other ports handling much of the volume.8 Oilprice.com notes that this recovery has done little to bring prices down. Rerouting, tanker shortages, ship-to-ship transfers and military escorts keep delivered crude expensive, and Brent is still almost $30 above its prewar level. A Kpler analyst also suggested that some Gulf states may be paying Iran for safe passage, a claim that has not been verified.2

In other words, volumes have mostly come back, but costs have not. Freight rates for tankers moving oil from the Gulf to North Asia have topped $1 million a day, compared with about $60,000 in January, according to ANZ figures cited in the reporting.5

Forecasters are split. Goldman Sachs raised its December Brent forecast to $90 from $85, with a risk premium of just over $20 built in. It warned that Brent could average about $125 in 2027 if Gulf output stays 5 million barrels a day below February levels.95 The EIA's October outlook went further, raising its fourth-quarter Brent forecast by $14 to $105.8 A 100-million-barrel G7 reserve release and Trump's pledge not to strike Iran before the November 3 midterms are pulling prices the other way.83 My reading is that the market is now pricing in shipping and security costs that are likely to last, rather than a short-lived spike. That makes the August low near $85 look like a ceasefire hope that faded, not a new floor.

Natural gas: calm prices, rising demand forecasts

U.S. natural gas looks very different from oil. Henry Hub futures were around $3.22 per MMBtu in recent sessions, close to where they were before the war.210 The EIA expects Henry Hub to average about $3.43 in 2026 and $3.28 in 2027, as record production holds prices down for now.12

The longer-term forecasts are moving much faster than prices. In September, BloombergNEF said gas burned to power U.S. data centers could rise by about 15 billion cubic feet per day over the decade to 2035, more than double its December estimate of 6.9 Bcf/d. That figure already assumes many planned projects never get built.13 The firm put total data-center gas use at about 18 Bcf/d by 2035, more than Germany and Japan use combined.1419 BloombergNEF expects gas to supply 69% of the power for new grid-connected data centers and power-sector gas use to reach about 54 Bcf/d, up 18 Bcf/d from 2025.16

The supply math is where the bullish case comes from. U.S. producers are on track to add about 35 Bcf/d of output between 2025 and 2035. Demand from data centers plus roughly 21 Bcf/d of new LNG export demand could leave a gap of about 11 Bcf/d.1618 Wood Mackenzie said in July that cheap Henry Hub gas was coming to an end.16 BloombergNEF analyst Henry Eaton has said the error bars on the forecast are "fairly large" in both directions.19

Forecasts also differ on how big the data-center effect will be. S&P analysts quoted by Yes Energy expect data-center power demand to add about 4 Bcf/d by 2030, compared with more than 10 Bcf/d from LNG. That suggests exports, not AI, will drive gas demand in the near term.12 RBC's Christopher Louney estimates data-center gas demand could rise close to 20% by 2030.17 The two views can both hold. LNG drives growth this decade, and data-center demand builds toward the mid-2030s.

How oil and gas connect

The link between crude and gas is the least covered part of this story. Much U.S. gas comes out of the ground alongside oil in the Permian Basin. Stuart Turley of the Sandstone Group warned that if oil stayed below about $70, new Permian drilling could slow. That would cut this associated gas and push supply toward more expensive dry-gas wells.18 High oil prices have the opposite effect, and the war's high prices have quietly supported the gas supply that AI data centers depend on. If a lasting settlement over Hormuz sends Brent back toward August's levels and lower, it could make the long-term gas balance tighter.

Gas and power infrastructure is another constraint. PJM says building a new gas plant now takes at least four years even under optimistic conditions. It expects its summer peak demand to rise by about 82 gigawatts over 15 years.18 Most of the extra gas demand will come through the grid, not from on-site generators. That means households could share the cost through their electricity bills.14 Gulf storms add to the risk: Hurricane Isaias shut in about 1.1 Bcf/d of offshore gas production along with crude output.3

What to watch

Nvidia reports again on November 17, two weeks after the midterms end Trump's promised pause on strikes against Iran.273 The stock closed at $226.32 on October 12, giving the company a market value of about $5.5 trillion.27 The August episode showed how closely AI optimism and energy prices are tied in this market. Lower oil helped set up Nvidia's rally by bringing down yields. Since then, oil has rebounded, and the growth in AI energy demand is showing up first in long-term gas forecasts, not yet in prices. At about $3 gas, that cost has not arrived. The coverage suggests it will show up in later years, through LNG exports, power plants that take years to build, and a gas supply that partly depends on high oil prices.