There was little in the way in which of surprises from OPEC+ over the weekend, because the group elevated provide by 547k b/d for September. The market had largely anticipated the provision hike, one which marks the tip of the group returning the total 2.2m b/d of extra voluntary cuts. We imagine the group is completed with its provide hikes, as we transfer out of the stronger summer season demand interval and inventories begin to rise, ING’s commodity consultants Ewa Manthey and Warren Patterson be aware.
2026 WTI costs are buying and selling sub-$64/bbl
“Nonetheless, a lot additionally is determined by what occurs to Russian oil flows. The Trump administration threatens penalties on India for buying Russian power. This places within the area of 1.7m b/d of provide in danger if Indian refiners cease shopping for Russian oil. If there are not any different keen consumers for this oil, it might erase the anticipated surplus via the fourth quarter and 2026. It could additionally presumably present OPEC+ the chance to begin unwinding the following tranche of provide cuts totalling 1.66m b/d. Up to now, the US has threatened penalties on India. Much less has been mentioned concerning the movement of Russian oil to China. If the US efficiently targets these flows as effectively, it should depart the market significantly tighter and require OPEC+ to faucet even deeper into its spare manufacturing capability.”
“Considerations over the US imposing secondary tariffs on international locations that import Russian oil have speculators turning into extra constructive in direction of the market. The managed cash internet lengthy in ICE Brent elevated by 33,959 tons to 261,352 tons. This was pushed pretty evenly by contemporary shopping for, together with brief masking. Speculators stay supportive in direction of center distillates, growing their internet lengthy in ICE gasoil by 2,464 tons to 100,644 tons as of final Tuesday, the most important place held since March 2022. Nonetheless, the following launch might present a discount in positioning, given the sell-off we’ve seen within the gasoil crack since final Tuesday.”
“Rig exercise within the US continues to say no regardless of oil costs discovering higher assist in latest months. The oil rig depend fell by 5 during the last week to 410. That is the fourteenth consecutive week of declines, a interval throughout which the variety of lively rigs has fallen by 65. Whereas this decline might shock the market with immediate West Texas Intermediate (WTI) costs buying and selling close to $67/bbl, producers will probably be trying additional alongside the curve. For instance, 2026 WTI costs are buying and selling sub-$64/bbl.”
