Yesterday, oil prices surged as supply outages and a weaker dollar drove the market higher. Despite Gazprom halting supply to OMV, Russian pipeline gas continues to flow into Europe as usual.
Oil Prices Rally on Supply Disruptions
ICE oil prices jumped nearly 3.2% yesterday, supported by a softening USD. Production halts at the Johan Sverdrup field in Norway and the Tengiz field in Kazakhstan added to the upside momentum. Geopolitical tensions between Russia and Ukraine also contributed to the bullish sentiment.
Although the flat price strengthened, the prompt WTI time spread moved into contango, indicating a better-supplied market. Our global balance forecast shows a surplus through 2025, pending OPEC+’s output decisions. The group is expected to address this at their upcoming meeting on 1 December.
In European markets, prices edged slightly higher despite Gazprom cutting off gas supply to OMV. This move was in response to an arbitration ruling against OMV. While OMV faces potential supply risks, Russian pipeline flows to Europe remain unaffected for now.
Sugar Prices Rise on Brazil Mill Closures
Sugar prices continued their upward trend as Brazilian mills faced early closures due to excessive rainfall. While short-term supply may be impacted, the rainfall bodes well for the 2025/26 sugar production season set to begin in April.
US export inspection data showed mixed results, with wheat and soybean exports easing, while corn inspections increased. These trends reflect the ongoing dynamics in the agricultural markets.
Disclaimer: This publication by ING is for informational purposes only and does not constitute investment advice. Readers should consult with financial professionals before making any investment decisions.