Oil prices fell to their lowest in six months, dipping below $66 per barrel, as bearish supply/demand forecasts sent sentiment reeling. The International Energy Agency (IEA) and Energy Information Administration (EIA) releases fueled concerns about a potential surge in oil inventories.
However, hopes for a Russian-Ukraine ceasefire have boosted market sentiment, with some analysts predicting that secondary tariffs on key buyers may be limited to India. Trump’s threat of severe consequences if Putin fails to agree to a ceasefire has raised the stakes, but experts say the market should be able to withstand the impact.
The IEA expects large inventory builds towards the end of this year and through 2026, with global oil demand projected to grow by 680k b/d. Global supply is forecast to increase by 2.5m b/d in 2025 and 1.9m b/d in 2026. Despite these bearish forecasts, investment funds remain cautiously optimistic.
In the European natural gas market, speculators reduced their net long position on the TTF to 105TWh last week, citing uncertainty around the Trump-Putin summit. However, EUA prices have seen steady trading in recent weeks, with investors continuing to buy EUAs despite supply increases expected in 2026.
Source: https://think.ing.com/articles/the-commodities-feed-oil-falls-on-bearish-fundamentals-but-upside-risks-remain140825