Focus shifts from the Middle East to tariffs - ING

Oil prices are steady following the de-escalation in the Middle East. The ceasefire between Israel and Iran continues to hold. Meanwhile, nuclear talks between the US and Iran are set to resume next week, according to comments from President Trump. However, there are doubts over how successful these talks will be, ING's commodity experts Ewa Manthey and Warren Patterson note.

Market might turn the focus from the Middle East

"Assuming the ceasefire holds, the market might turn its focus to other drivers. US Secretary of Commerce Howard Lutnick said that the US and China have finalised a trade agreement that was crafted last month in Geneva. He also expects trade agreements to be reached with 10 major trading partners soon. This is constructive for the market, particularly ahead of the reciprocal tariff deadline of 9 July."

"The other focus is what OPEC+ decides on production levels for August. The group will make a decision on 6 July. We're of the view that the group will continue to aggressively unwind supply cuts and announce another supply hike of 411k b/d for August. These supply hikes should ensure that the oil market moves into a large surplus towards the end of the year. This assumes we don't see a re-escalation in the Middle East, which would lead to supply losses."

"Despite de-escalation between Israel and Iran, the ICE gasoil crack remains relatively well supported. The latest inventory data from Insights Global shows that refined product inventories in the Amsterdam-Rotterdam-Antwerp (ARA) region in Europe fell by 208kt WoW to 5.51mt. This decrease was driven by middle distillates, with gasoil stocks falling by 211kt to 1.85mt, while jet fuel inventories declined by 39kt to 870kt. Other refined products saw marginal increases in stocks."