Selloff was a Question of When, Not If: JPMogan's Pandit
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Yahoo
33 minutes ago
- Yahoo
Oil Prices Caught Between a $70 Summer and Growing Surplus Fears
(Bloomberg) -- Oil traders are grappling with a tension — there's a growing chorus of warnings about the market weakening later this year and into 2026, but for now prices are holding strong near $70 a barrel. The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Trump Administration Sues NYC Over Sanctuary City Policy France's TotalEnergies SE last week warned the market is facing abundant supply as the OPEC+ group unwinds output curbs, even as slowing global growth weighs on demand. Norway's Equinor ASA said its new Johan Castberg field is operating at full pelt, with a Brazilian offshore asset starting soon, a reminder of additional barrels expected from outside the producer group. Both the International Energy Agency and the US Energy Information Administration earlier this month bolstered their estimates for the surplus they see next year. The two widely-followed forecasters expect supply to eclipse demand by the most since the pandemic, with the IEA's projection at 2 million barrels a day. A surplus that pushes prices lower will help tame inflation, hurt high-cost producers and likely please US President Donald Trump who has called for lower prices since taking office. It's a stark contrast with the here and now, where inventories at key storage hubs remain low, reflected in a bullish market structure that indicates tight supplies. Profits from turning crude into fuels are also far above seasonal norms, underpinning demand for crude. 'One of the issues that has been supporting oil has been the seasonal strength of the summer months,' Francisco Blanch, head of commodities and derivatives research at Bank of America Corp. said in a Bloomberg TV interview. 'Second half of the year the surplus is going to be close to 200 million barrels,' which will ultimately weigh on prices, he added. While most of the IEA's revision of next year's outlook centered on output additions by the Organization of the Petroleum Exporting Countries and its allies, who will meet to discuss output levels in early August, there were also some less obvious drivers. Forecasts for the supply of biofuels, which compete with conventional oil, are about 200,000 barrels a day higher than two months ago in the agency's estimates. The US government now sees global oil supplies about 2.1 million barrels a day higher in the fourth quarter of this year than the first, the biggest increase it has seen over the period since February. The two bodies' forecasts constitute an important element in traders' evaluations of how the market will unfold. For now, signs of robust demand remain. Leading oil trader Vitol Group said last week that jet fuel demand has been steadily climbing, with flight numbers reaching all-time highs. US weekly oil-demand figures are the highest this year. That data has been revised higher in final monthly readings for four of the last five periods where complete figures are available. And while the global trade war offers reason to be concerned about consumption, historically demand estimates have tended to be revised higher too, suggesting that the currently-expected surplus could narrow. From 2012 to 2024, the IEA's demand forecasts have ended up being on average close to 500,000 barrels a day higher than when the estimate was first issued, as more data became available. That excludes 2020, when the global pandemic transformed consumption patterns. Still, once the summer's strength wanes, a global surplus is likely to emerge, according to Natasha Kaneva, JPMorgan Chase & Co.'s head of global commodities strategy. 'Supply is increasing,' Kaneva said in a Bloomberg TV interview. 'At some point this inventory build will start showing up in visible inventories in OECD countries like the United States. At the moment it's not priced in.' --With assistance from Julian Lee, Grant Smith, Kari Lundgren, Lisa Abramowicz, Scarlet Fu and Romaine Bostick. Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme Elon Musk's Empire Is Creaking Under the Strain of Elon Musk A Rebel Army Is Building a Rare-Earth Empire on China's Border ©2025 Bloomberg L.P.
Bloomberg
an hour ago
- Bloomberg
US and EU Leaders Shake Hands Following Trade Deal
President Trump shakes hands with EU Commission President Ursula von der Leyen following trade deal. The deal will see the bloc face 15% tariffs on most of its exports, including automobiles, staving off a trade war that could have delivered a hammer blow to the global economy. (Source: Bloomberg)
Bloomberg
2 hours ago
- Bloomberg
Big Take: Tariffs Risk $2 Trillion Hit to Global GDP
For months, the impact of President Trump's aggressive trade policy has largely felt theoretical. But with an Aug. 1 tariff extension on the horizon and a consequential week ahead for the president's broader economic agenda, the cracks are beginning to show. On today's Big Take podcast, Bloomberg senior economic writer Shawn Donnan joins David Gura to break down the tariff fallout hiding in plain sight, and which sectors and countries are being hit the hardest.
