Brent creeps back above $70/bbl – ING

Oil prices edged higher yesterday, with Brent settling back above $70/bbl. This is despite ongoing uncertainty over tariffs, along with OPEC+ recently announcing a larger-than-expected increase in supply for August, ING's commodity experts Ewa Manthey and Warren Patterson note.

Tensions in the Middle East are rising

"Increased tensions in the Middle East, in the form of Houthi attacks on vessels in the Red Sea, will provide some support. Also, the market remains tight in the near term, as reflected in the time spreads. This will likely persist through the northern hemisphere summer, when we see seasonally stronger demand. The oil market only starts to loosen from the fourth quarter, when we expect to see more sustainable downward pressure on prices."

"Numbers from the API overnight were bearish for oil, with US crude inventories rising by 7.1m barrels, while Cushing crude oil stocks increased by 100k barrels. Changes in refined products were more constructive with gasoline inventories falling by 2.2m barrels, while distillate stocks declined by 800k barrels. The drop in distillate stocks will do little to help relieve concerns over a tightening middle distillate market."

"The Energy Information Administration (EIA) released its latest Short Term Energy Outlook yesterday, revising lower US crude oil production growth estimates for this year. The EIA now expects US crude oil production to grow by around 160k b/d YoY to 13.37m b/d in 2025, compared to a previous growth estimate of around 210k b/d year on year. For 2026, the EIA expects US oil supply growth to be flat. However, the drastic slowdown in drilling activity suggests that there is downside for 2026 production."