Created
: 2025.08.04
2025.08.04 18:38
There was little in the way of surprises from OPEC+ over the weekend, as the group increased supply by 547k b/d for September. The market had largely expected the supply hike, one that marks the end of the group returning the full 2.2m b/d of additional voluntary cuts. We believe the group is finished with its supply hikes, as we move out of the stronger summer demand period and inventories start to rise, ING's commodity experts Ewa Manthey and Warren Patterson note.
"However, much also depends on what happens to Russian oil flows. The Trump administration threatens penalties on India for purchasing Russian energy. This puts in the region of 1.7m b/d of supply at risk if Indian refiners stop buying Russian oil. If there are no other willing buyers for this oil, it would erase the expected surplus through the fourth quarter and 2026. It would also possibly provide OPEC+ the opportunity to start unwinding the next tranche of supply cuts totalling 1.66m b/d. So far, the US has threatened penalties on India. Less has been said about the flow of Russian oil to China. If the US successfully targets these flows as well, it will leave the market considerably tighter and require OPEC+ to tap even deeper into its spare production capacity."
"Concerns over the US imposing secondary tariffs on countries that import Russian oil have speculators becoming more constructive towards the market. The managed money net long in ICE Brent increased by 33,959 lots to 261,352 lots. This was driven fairly evenly by fresh buying, along with short covering. Speculators remain supportive towards middle distillates, increasing their net long in ICE gasoil by 2,464 lots to 100,644 lots as of last Tuesday, the largest position held since March 2022. However, the next release may show a reduction in positioning, given the sell-off we've seen in the gasoil crack since last Tuesday."
"Rig activity in the US continues to decline despite oil prices finding better support in recent months. The oil rig count fell by five over the last week to 410. This is the fourteenth consecutive week of declines, a period during which the number of active rigs has fallen by 65. While this decline may surprise the market with prompt West Texas Intermediate (WTI) prices trading near $67/bbl, producers will be looking further along the curve. For example, 2026 WTI prices are trading sub-$64/bbl."
Created
: 2025.08.04
Last updated
: 2025.08.04
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy