Brent: Rally extends above $91/bbl – ING
ING strategists Ewa Manthey and Warren Patterson note that Brent Oil has extended its rally, trading above $91/bbl as geopolitical risks and supply concerns support prices.
Brent Oil prices have continued their upward trend, surpassing $91 per barrel, according to ING strategists Ewa Manthey and Warren Patterson. Geopolitical risks, supply concerns, and the potential of a US-Iran peace agreement have bolstered prices. The US President's decision not to extend the peace agreement and ongoing security issues in the Strait of Hormuz have heightened fears of supply disruptions.
Saudi Arabia is reportedly diversifying its export routes by marketing crude cargoes from locations off the coast of Oman, including Arab Medium and Arab Heavy grades, through ship-to-ship transfers from terminals like Sohar. Chinese refinery output dropped 15.8% year-on-year in July, while apparent oil demand fell 17.5% year-on-year due to reduced industrial activity, weak refining margins, and increased electric vehicle adoption.
Middle distillates have also shown strength, with the ICE gasoil crack nearing $76 per ton. Reports of Ukrainian attacks on Russia's Ust-Luga processing facility and ongoing Russian diesel export restrictions have further supported support. Speculative net-long positions have risen for the sixth consecutive week to their highest level since February.
GBP/USD has struggled to gain traction, trading below 1.3550 in European trading hours, while EUR/USD remains below 1.1600 despite improving economic sentiment in the Eurozone and Germany. US Dollar (USD) gains from the risk-averse market atmosphere as tensions in the Middle East remain high, hindering any upward movement for the pair.
Gold has dipped below $4,400, snapping a two-day winning streak due to a stronger US Dollar. Rising oil prices bolster the argument for at least one interest rate hike by the US Federal Reserve in 2026. Ripple (XRP) and Stellar (XLM) continue to face pressure from market uncertainty and weak technical momentum, leaving both cryptocurrencies vulnerable to further decline.
US Treasury yields are climbing across the curve, with the 30-year Treasury bond nearing its highest level since the 2007 global financial crisis at 5.33% as of Monday, driven by concerns over the US fiscal deficit and doubts about the Federal Reserve's independence.
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