CRUDE IN SIGHT

Crude stuck in narrow band, surrenders modest gains from Trump-Xi call - June 6, 2025

  • Crude futures had unwound nearly all of Thursday’s modest gains from optimism fuelled by a phone call between Presidents Donald Trump and Xi Jinping by early morning in Europe on Friday. The two leaders agreed to resume trade negotiations, prompting relief after a recent escalation in tensions.
  • Russia launched a massive missile and drone attack on Ukraine overnight in retaliation for Ukraine’s covert drone operation against Russian airfields last Sunday. Russia and Ukraine may need to “keep fighting” before either side is ready for a ceasefire, Trump said on Thursday.

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OIL VIEWSLETTER

Storm in crude's teacup leaves Brent anchored in the mid-$60s - June 2, 2025

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BULLS & BEARS

Mildly bearish near-term and second-half April - April 2, 2025

After weighing the factors supporting and weighing on crude, we concluded:

  • MILDLY BEARISH sentiment for the near-term and
  • MILDLY BEARISH sentiment for second-half April

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EXECUTIVE BRIEFING NOTES

US' tough new Russia oil sanctions may have a short shelf life - Jan. 12, 2025

The Biden administration took oil market players by surprise on Friday by announcing the most expansive sanctions yet against Russia’s oil sector. 

We suspect it was not only the oil market; the US’ European Union allies across the pond may have also been caught unawares – we couldn’t find a single reaction from any of the region’s leaders! The UK, for what it is worth, joined the US, simultaneously announcing sanctions against Gazpromneft and Surgutneftegas, 

It was curious to see Biden fire the bazooka just 10 days before handing over charge to Donald Trump, who is clearly going to have a vastly different approach to resolving the Ukraine war.

What does the upcoming change of guard in the US say for the durability of the latest round of sanctions and crude’s 4% spike on Friday? Our succinct insights in this report.

OIL RADAR

OIL IN 2025: Softer crude prices but not because of oversupply - Dec. 27, 2024

Benchmark Brent crude prices averaged just under $80/barrel in 2024, about 2.7% lower versus last year.

We expect the average to dip into the $70-75/barrel band in 2025, but not because of a sizeable oversupply in the market, let alone a “glut”. 

A sombre economic outlook for 2025, bolstered by China’s uphill battle to jump-start growth and amplified by expectations of a fresh round of trade wars under Trump 2.0, has shaped a bearish narrative around oil demand. 

But we would caution against leaning too much into the gloom-and-doom scenario. 

Crude is more likely to come under pressure from an evaporating geopolitical risk premium and worries over economic stability than any severe economic downturns or recessions.

Oil demand could remain relatively resilient, helped by softer prices, leading to a largely balanced market, especially with OPEC+ remaining extra cautious and conservative in bringing back the barrels it has locked away.

What challenges our baseline views? We also bring you the contrarian perspective and wildcards!