Oil Market Pressure Builds Amid OPEC+ Output Policy Noise
The oil market is feeling the heat as discussions intensify surrounding OPEC+’s production policy for July. Speculations hint at a potential significant supply increase, following previous boosts in May and June. This shift in strategy from price defense to market share protection could have significant implications for oil prices.
Our projections anticipate a 411k b/d supply rise by OPEC+ in July, which could keep oil prices steady. We currently predict oil prices to average US$59/bbl in the fourth quarter. Additionally, the front-month ICE Brent timespread has decreased from US$0.74/bbl to around US$0.50/bbl, signaling market dynamics.
On the geopolitical front, finance ministers at the G7 summit have hinted at further sanctions against Russia if progress is not made in Ukraine peace negotiations. The EU is also considering lowering the price cap for Russian oil from US$60/bbl to US$50/bbl, impacting the trading landscape.
In the US, natural gas prices saw a dip following a 3.4% drop in NYMEX Henry Hub prices, driven by increased storage levels. The Energy Information Administration reported a 120 billion cubic feet rise in natural gas storage, exceeding market expectations and the 5-year average.
Agriculture Sector Updates: Corn Balance Sheet Adjustments
The International Grains Council revised its 2025/26 global corn output and demand forecasts, leading to changes in global ending stock estimates. While global ending stocks are projected to increase, demand estimates have been slightly adjusted, impacting stock levels for the upcoming years.
Disclaimer: This information is provided by ING for informational purposes only and does not constitute investment advice. Readers are advised to make financial decisions based on their own circumstances and objectives. Read more