Oil: Supply risks offset US stock build – ING

ING’s Warren Patterson and Ewa Manthey say ICE Brent is supported with $70/bbl back in sight as uncertainty over Iran and OPEC+ output cuts offset a large US inventory build. They highlight recovering Kazakhstan and CPC exports, widening Canadian crude discounts, and shifting Indian demand away from Russian barrels following the US‑India trade deal.

Brent supported by OPEC+ and flows

"Oil prices remain well supported, with $70/bbl back in sight for ICE Brent. Lingering uncertainty over Iran continues to buoy the market. Meanwhile, refinery margins also saw some strength following reports of a Ukrainian drone attack on Lukoil’s 300k b/d Volgograd refinery in Russia – the first large attack on Russian refining infrastructure this year."

"In its latest monthly market report, OPEC kept its demand growth forecasts unchanged for 2026 and 2027 at 1.38m b/d and 1.34m b/d, respectively. These numbers remain above most other demand growth forecasts. Meanwhile, OPEC+ output came under pressure in January, falling 439k b/d MoM to 42.45m b/d."

"Kazakhstan's oil output will recover through February, with the power issues that disrupted production in January at the Tengiz and Korolev oilfields resolved. Meanwhile, the completion of repair work at the CPC terminal should also lead to a recovery in loadings from the terminal. Reports suggest that February loadings are expected to come in between 1.15-1.25m b/d, up from 907k b/d in January, but lower than originally expected as production from the Tengiz field recovers gradually."

"Meanwhile, March loadings are expected to be somewhere between 1.55-1.65m b/d. A recovery in exports from the CPC terminal should help ease some of the tightness we have seen in the oil market so far this year."

"The degree to which India reduces these purchases, and the ability of Russia to divert this volume to other buyers will be important for the oil market."

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