Oil: Tightening supply supports elevated prices – BNY
BNY notes Crude Oil prices remain elevated as doubts over a U.S.–Iran deal heighten supply concerns. The IEA reports global Oil markets tightened further in July, with demand, supply, refining runs and inventories all affected by geopolitical disruptions and high fuel prices.
BNY notes that elevated Crude Oil prices are supported by supply concerns due to doubts about a U.S.–Iran deal. According to the IEA, global oil markets tightened further in July, with demand, supply, refining operations, and inventories all impacted by geopolitical disruptions and high fuel prices. The 2026 demand outlook was revised downward, with observed inventories falling significantly and Brent and WTI prices increasing.
The IEA reported a decline in global oil demand to 1.6 million barrels/day in 2026, a reduction of 510,000 barrels/day from the previous month's estimate, caused by the closure of the Strait of Hormuz and high fuel prices. While supply rose to 101.5 million barrels per day in July, it remained below pre-pandemic levels, with Gulf output largely offline.
Refinery throughput also increased to 80.9 million barrels per day in July, but remained nearly 5 million barrels below last year's levels, with further cuts anticipated in Q3. Observed crude inventories fell by 69 million barrels in July, contributing to sharp price movements amid backwardation and tighter product markets.
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