OPEC+ agreed to a different giant provide hike over the weekend, growing it by 411k b/d efficient July. The rise is much like these in Could and June. By the tip of July, the group may have introduced again greater than 60% of the two.2m b/d value of deliberate provide will increase, ING’s commodity consultants Ewa Manthey and Warren Patterson observe.
Decrease Oil costs proceed to weigh on US drilling exercise.
“The newest enhance is in step with our expectations. We’re additionally assuming that OPEC+ will proceed with these giant provide hikes. This could imply that the complete 2.2m b/d of provide will likely be introduced again by the tip of the third quarter of this yr, 12 months forward of schedule. That is the important thing assumption behind our worth forecast for ICE Brent to common US$59/bbl within the fourth quarter. Regardless of the big enhance, Oil costs rallied this morning.”
“Rising tensions between Russia and Ukraine added additional assist to the market this morning. Ukraine carried out large-scale drone assaults on a number of Russian airfields, which comes forward of peace talks between Russia and Ukraine this week. As well as, some US senators are pushing for more durable sanctions towards Russia, with a proposal to impose 500% tariffs on imports from international locations that purchase Russian Oil. Republican Senator Lindsey Graham and Democratic Senator Richard Blumenthal hope to have sanctions in place by the point of the G-7 summit in mid-June. Whereas President Trump seems to be more and more pissed off with President Putin, he’s to date been reluctant to impose further sanctions. Actions that efficiently goal Russian Oil flows will change the outlook for the Oil market drastically.”
“Decrease Oil costs proceed to weigh on US drilling exercise. The newest Baker Hughes information reveals that the US Oil rig depend fell by 4 to 461, the fifth consecutive week of declines. Given our view for Oil costs to maneuver decrease in direction of the tip of this yr, we’d count on to see further slowing in drilling exercise, calling into query forecasts for development in US Oil provide subsequent yr. The newest positioning information reveals that speculators lowered their internet lengthy in ICE Brent by 4,379 tons to 158,950 tons as of final Tuesday. It reveals that speculators are fairly cut up, with the gross lengthy place growing by 12,543 tons over the week and the gross brief growing by 16,922 tons.”
