Oil will be in focus next week with OPEC+ meeting and likely to announce the return of another 144K bpd. That process should continue until October but so far it’s gone a tad better than feared. Two months ago, there was talk of $40 oil and now if you exclude the Iran war fears, crude is above any levels since March.
The fear is that inventories will begin to build in the autumn and through the winter before US shale begins to wane. If that’s the case, it might take all of 2026 to soak up the excess and that might be when crude starts to get interesting again, as the shale treadmill is looking worn out.
Technically, I highlighted the inverted head-and-shoulders many times before it popped last month and now it’s back at the neckline and that’s acting as support. By-and-large, the consensus is still very bearish on oil but with risk sentiment improving and the US dollar falling, the pain trade is likely higher, though I would be in no rush to chase it ahead of the July 6 OPEC meeting.
WTI crude oil weekly
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