Brent: Rally extends above $91/bbl – ING

ING strategists Ewa Manthey and Warren Patterson note that Brent Oil has extended its rally, trading above $91/bbl as geopolitical risks and supply concerns support prices. They highlight US President Donald Trump's decision on the US-Iran peace agreement, security risks in the Strait of Hormuz, and Saudi Arabia’s efforts to diversify export routes away from the Persian Gulf.

Geopolitics and supply underpin Brent

"Oil prices extended gains for a third consecutive session, with ICE Brent trading above $91/bbl. Sentiment remained supported by US President Donald Trump's decision not to extend the US-Iran peace agreement and continued security concerns in the Strait of Hormuz, raising fears of supply disruptions."

"Saudi Arabia is reportedly offering crude cargoes from locations off the coast of Oman, signalling efforts to expand export routes outside the Persian Gulf. Saudi Aramco is marketing Arab Medium and Arab Heavy grades via ship-to-ship transfers from terminals including Sohar."

"Chinese refinery throughput fell 15.8% year-on-year to 12.5m b/d in July, highlighting weak refining activity. Apparent oil demand also declined 17.5% YoY to 12.04m b/d amid softer industrial activity, weak refining margins and growing EV adoption."

"Middle distillates strengthened further, with the ICE gasoil crack nearing $76/t. Support came from reports of Ukrainian attacks on Russia's Ust-Luga processing facility and ongoing Russian diesel export restrictions."

"Reflecting tighter market expectations, speculative net-long positions rose for a sixth consecutive week to their highest level since February."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)