Oil: Downside momentum persists as flows recover – ING

Source Fxstreet

ING strategists Warren Patterson and Ewa Manthey note that Oil rebounded after a vessel was struck in the Persian Gulf, but they stress that price momentum remains to the downside as flows through the Strait of Hormuz recover. They highlight fragile regional security, potential slowing of vessel traffic, and ongoing risks to future supply dynamics.

Hormuz risks and OPEC tensions

"The sell-off in the oil market came to an abrupt halt yesterday after reports of a commercial vessel being struck in the Strait of Hormuz. It highlighted the fragile state of the ceasefire, while also demonstrating the risks facing vessels in the Persian Gulf. This latest development saw ICE Brent reverse its earlier-day losses, settling more than 2% higher."

"However, despite this move, market momentum still appears to be largely downward. The market is largely focused on the resumption of oil flows through the Strait of Hormuz, which continues to increase. However, much of the increase reflects previously stranded vessels leaving the Persian Gulf."

"It suggests that once stranded vessels have moved out, we could see a pullback in flows. Also, the latest strike on a vessel will likely slow traffic, with the International Maritime Organisation suspending its evacuation plan for stranded ships."

"OPEC is facing additional challenges following the UAE's recent exit. Iraq’s oil ministry is now pressuring the group for a higher production quota, threatening to rethink its membership if it doesn't receive a larger one. Iraq is the second-largest producer within the group."

"Comments from the oil ministry appear more like a threat. Clearly, if things become more serious, it will only add to the surplus narrative for 2027. Iraq has a production capacity of almost 4.7m b/d"

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

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Will the Tech Rally Continue? The Technical Verdict on the NASDAQ 100 Riding a massive 32% post-earnings wave, the Nasdaq-100 is showing its first signs of exhaustion. We break down crucial exit and entry rules for long positions this week.
Author  Mitrade Team
6 Month 05 Day Fri
Riding a massive 32% post-earnings wave, the Nasdaq-100 is showing its first signs of exhaustion. We break down crucial exit and entry rules for long positions this week.
placeholder
Tech Rout and Rate Hike Fears Drag Asian Stocks LowerAsian equities retreated on Friday as investors locked in technology profits ahead of U.S. payroll data, while South Korean labor friction and Japanese rate-hike speculation compounded regional market losses.
Author  Mitrade Team
6 Month 05 Day Fri
Asian equities retreated on Friday as investors locked in technology profits ahead of U.S. payroll data, while South Korean labor friction and Japanese rate-hike speculation compounded regional market losses.
placeholder
OPEC+ Deepens Production Hikes as Hormuz Bottlenecks Stifle Actual SupplyOPEC+ core members will lift July oil quotas by 188,000 barrels per day, but geopolitical shipping constraints and the UAE’s exit keep actual global crude supplies tight.
Author  Mitrade Team
6 Month 08 Day Mon
OPEC+ core members will lift July oil quotas by 188,000 barrels per day, but geopolitical shipping constraints and the UAE’s exit keep actual global crude supplies tight.
placeholder
WTI Crude Slips Below $90 as Easing Mideast Tensions and Supply Dynamics Flash Bearish Signals WTI crude breached the critical $90 threshold as fading Middle East risks and technical breakdowns signaled a bearish pivot, leaving oil vulnerable to further downside toward $85.
Author  Mitrade Team
6 Month 09 Day Tue
WTI crude breached the critical $90 threshold as fading Middle East risks and technical breakdowns signaled a bearish pivot, leaving oil vulnerable to further downside toward $85.
placeholder
US Attacks Iran Amid the “Ceasefire”: Bitcoin, Gold, and Oil ReactThe United States launched strikes against Iran on Tuesday after a US Apache helicopter was downed over the Strait of Hormuz, breaking the fragile ceasefire previously announced by President Donald Tr
Author  Mitrade Team
6 Month 10 Day Wed
The United States launched strikes against Iran on Tuesday after a US Apache helicopter was downed over the Strait of Hormuz, breaking the fragile ceasefire previously announced by President Donald Tr
Related Instrument
goTop
quote