Oil: Upside risks linger as recovery questioned – ING
ING strategists Michiel Tukker and Benjamin Schroeder note that Oil has returned to pre-war levels but argue the market is overly optimistic about the speed and durability of the supply recovery. They highlight an unstable balance between demand, physical buying and strategic reserves, and stress that second-round inflation risks and Oil’s future trajectory will only become clearer later this year.
Supply recovery doubts support prices
"The recent fall in oil prices can partly be attributed to the current imbalance between supply and demand."
"Physical buyers are still awaiting better pricing while countries’ strategic reserves continue to add supply to the market."
"This is not a stable equilibrium, however. At some point, buyers will need to enter the market, and reserves will have to be replenished."
"Oil is stabilising around pre-war levels, but we continue to see upside risks in the near term that could pose some upward pressure on rates."
"Only later this year will we have a better understanding of the second-round inflation impact and more certainty about the trajectory of oil."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
FAA halts certification of Boeing 737 MAX 10, shares drop nearly 7%
The FAA has announced the suspension of the Boeing 737 MAX 10 certification due to a new software defect provided by GE Aerospace. This defect could impact the automatic flight guidance function and increase pilot workload during recertification scenarios. There are over 1,500 pending orders for the MAX 10, and certification is crucial for Boeing to improve cash flow and compete against Airbus. The previously expected October certification timeline has been delayed once again. Boeing's share price fell 6.9% on Monday.
Indirect Negotiations Between the US and Iran? Iran Makes Concessions? Major Differences Remain? Saudi Arabia Resumes Exports? Overnight Oil Prices Volatile and Falling Amid Mixed Bullish and Bearish Views
On Monday, after WTI peaked at $96.54 and Brent surged to $108.83, both benchmarks retreated by over $5 within a few hours. The resumption of Saudi Arabia's East-West pipeline constituted the first substantial bearish factor. Meanwhile, US-Iran diplomatic developments escalated: reports claimed Trump was willing to ease sanctions in exchange for nuclear concessions, which he immediately denied in person; Iran was reportedly willing to suspend uranium enrichment, but the US stated that “major differences remain.” Privately, Iran believes the chances of reaching a deal before the US presidential election are slim. Expectations are for potential escalation in conflicts after the election, making it difficult for market risk premiums to dissipate.
$100 Oil Price Spurs 'Cash Flow Revaluation' Logic! BP Plans to Sell Brazilian Biofuel Business to Accelerate Focus on Oil and Gas Assets
BP Plc is considering various options for its Brazil biofuel business, including a sale, as CEO Meg O'Neill accelerates efforts to reshape the energy giant's business portfolio.
Pump.fun: Why PUMP’s 20% surge faces KEY test despite $466M buybacks
Crypto prices
More
