Analys
Crude oil comment – Hard to be bullish for the coming 6 months

Crude oil price action – Down and then back towards the $48/b converging point – for now
- Crude oil comment – Hard to be bullish for the coming 6 months
- Graph: US commercial crude and product stocks – on par with two years production from US frack log
- Graph: Less Brent crude 12mth contango lately, but mostly since longer dated contracts are falling
- Graph: The relentless decline of the Brent crude oil December 2019 contract
- Graph: China Leading Index inched yet lower to 98.23 and the lowest since 2009
Crude oil price action – Down and then back towards the $48/b converging point – for now
Brent crude oil traded down 2.6% yesterday to $47.34/b amid a broad based sell-off in European and US equities (-2.6%). Growth concerns for China (industrial profits down 8.8% y/y in August) and the close to 30% drop in Glencore shares helped to drive the bearish sentiment. Do note that Industrial metals only lost 1% so there was not really much of a shake-out in metals on the back of rising China concerns yesterday. Note that while Brent crude saw a percentage wise large drop yesterday, it did not stray too far from the $48/b line which has been a converging price point lately. Today Asia is in the red following the US from last night, but US equities are rebounding. Also Brent crude is rebounding today to $47.7/b and is closing in on the $48/b level again.
Crude oil comment – Hard to be bullish for the coming 6 months
It is difficult to be bullish for the coming 6 months. First out in October and November is the refining turnaround season where refineries now increasingly are taken off-line for maintenance and adjustments ahead of the Northern hemisphere winter season. As this happens more crude oil is left in the market as refineries are not consuming it. Chinese refineries are also projected to process some 250 kb/d to 400 kb/d less in Q4-15 than in Q3-15. At the same time crude oil production in the North Sea is increasing into October and may rise further in November and December, potentially to multi year high. While Q4 is normally a strong demand period of the year it also marks the entrance into demand weakness in Q1 and Q2. We are quite confident that OPEC will not trim its production at its December 4 meeting in Vienna. We are also quite confident that Iran will increase exports of crude oil in Q1 and Q2 as sanctions are lifted and that we overall will get yet another strong rise in global oil stocks in 1H-16. Global oil inventories are already very high with commercial OECD stocks up 272 mb y/y in July to 2972 mb. Of this the US account for 825 mb of crude, gasoline and distillates with a y/y rise of 124 mb (September). On top of this we have the so called US fracklog of drilled wells that have not yet been fracked and put into production. It is difficult to know the size of the fracklog exactly but one estimate places it at around 4500 wells. If we view the fracklog as a kind of oil storage, then 4500 wells amounts to around 800 mb of crude oil that can be put into the market over two years. In other words if all these 4500 wells were producing for two years they would yield some 800 mb of crude oil. After those two years comes the tail-production which will yield even more oil, but over quite a few years.
Counter to this however is the intensifying credit and liquidity situation for the many smaller US shale oil players which will lead to continued declining US crude oil production. Overall however there is limited risk to the upside with so much oil at hand in stocks around the world as well as the US fracklog. In a slightly longer perspective towards the end of 2016 deciding whether the market will be in surplus or deficit in Q4-16 is highly uncertain and will amongst other things depend highly on OPEC production. OPEC has increased production by between 1-2 mb/d this year with main contributors being Iraq and Saudi Arabia. While we expect increasing exports from Iran, it is highly uncertain whether we will see the same increase from Iraq and Saudi Arabia in 2016 as in 2015.
US commercial crude and product stocks – on par with two years production from US frack log
Two years of production from the US fracklog of yet unfracked, but drilled wells will yield crude oil in a magnitude of the current US commercial oil inventories.
Less Brent crude 12mth contango lately, but mostly since longer dated contracts are falling
A key factor here is however that this is not so much to do with strengthening in the front end of the curve, but more to do with a relentless decline in longer dated contracts.
The relentless decline of the Brent crude oil December 2019 contract
The front end of the Brent crude oil curve seems to be very well supported at the $48/b level for the time being. However as the longer dated contracts like the Dec-19 contract ticks lower and lower it forces the curve to be flatter with less contango. If stocks are to increase yet further, which is our base case into 1H-16, an increase in the contango will however be needed. If the longer dated contracts continue to push lower or just stay steady at current level, then the front end contract will need to move lower in order to create the necessary contango to hold increasing storage. At the moment we expect the longer dated contracts to continue lower as producers need to hedge out on the curve while consumer will preferred to purchase oil more towards the front end of the curve in order to utilize contango and low spot crude oil prices.
And then one last graph for the China bears. The China Leading Index inched yet lower to 98.23 and the lowest level since 2009.
Watch out for China PMI manufacturing and services index on Thursday this week.
Bjarne Schieldrop
Chief analyst, Commodities
SEB Markets
Merchant Banking
Analys
OPEC+ in a process of retaking market share

Oil prices are likely to fall for a fourth straight year as OPEC+ unwinds cuts and retakes market share. We expect Brent crude to average USD 55/b in Q4/25 before OPEC+ steps in to stabilise the market into 2026. Surplus, stock building, oil prices are under pressure with OPEC+ calling the shots as to how rough it wants to play it. We see natural gas prices following parity with oil (except for seasonality) until LNG surplus arrives in late 2026/early 2027.

Oil market: Q4/25 and 2026 will be all about how OPEC+ chooses to play it
OPEC+ is in a process of unwinding voluntary cuts by a sub-group of the members and taking back market share. But the process looks set to be different from 2014-16, as the group doesn’t look likely to blindly lift production to take back market share. The group has stated very explicitly that it can just as well cut production as increase it ahead. While the oil price is unlikely to drop as violently and lasting as in 2014-16, it will likely fall further before the group steps in with fresh cuts to stabilise the price. We expect Brent to fall to USD 55/b in Q4/25 before the group steps in with fresh cuts at the end of the year.

Natural gas market: Winter risk ahead, yet LNG balance to loosen from 2026
The global gas market entered 2025 in a fragile state of balance. European reliance on LNG remains high, with Russian pipeline flows limited to Turkey and Russian LNG constrained by sanctions. Planned NCS maintenance in late summer could trim exports by up to 1.3 TWh/day, pressuring EU storage ahead of winter. Meanwhile, NE Asia accounts for more than 50% of global LNG demand, with China alone nearing a 20% share (~80 mt in 2024). US shale gas production has likely peaked after reaching 104.8 bcf/d, even as LNG export capacity expands rapidly, tightening the US balance. Global supply additions are limited until late 2026, when major US, Qatari and Canadian projects are due to start up. Until then, we expect TTF to average EUR 38/MWh through 2025, before easing as the new supply wave likely arrives in late 2026 and then in 2027.
Analys
Manufacturing PMIs ticking higher lends support to both copper and oil

Price action contained withing USD 2/b last week. Likely muted today as well with US closed. The Brent November contract is the new front-month contract as of today. It traded in a range of USD 66.37-68.49/b and closed the week up a mere 0.4% at USD 67.48/b. US oil inventory data didn’t make much of an impact on the Brent price last week as it is totally normal for US crude stocks to decline 2.4 mb/d this time of year as data showed. This morning Brent is up a meager 0.5% to USD 67.8/b. It is US Labor day today with US markets closed. Today’s price action is likely going to be muted due to that.

Improving manufacturing readings. China’s manufacturing PMI for August came in at 49.4 versus 49.3 for July. A marginal improvement. The total PMI index ticked up to 50.5 from 50.2 with non-manufacturing also helping it higher. The HCOB Eurozone manufacturing PMI was a disastrous 45.1 last December, but has since then been on a one-way street upwards to its current 50.5 for August. The S&P US manufacturing index jumped to 53.3 in August which was the highest since 2022 (US ISM manufacturing tomorrow). India manufacturing PMI rose further and to 59.3 for August which is the highest since at least 2022.
Are we in for global manufacturing expansion? Would help to explain copper at 10k and resilient oil. JPMorgan global manufacturing index for August is due tomorrow. It was 49.7 in July and has been below the 50-line since February. Looking at the above it looks like a good chance for moving into positive territory for global manufacturing. A copper price of USD 9935/ton, sniffing at the 10k line could be a reflection of that. An oil price holding up fairly well at close to USD 68/b despite the fact that oil balances for Q4-25 and 2026 looks bloated could be another reflection that global manufacturing may be accelerating.
US manufacturing PMI by S&P rose to 53.3 in August. It was published on 21 August, so not at all newly released. But the US ISM manufacturing PMI is due tomorrow and has the potential to follow suite with a strong manufacturing reading.

Analys
Crude stocks fall again – diesel tightness persists

U.S. commercial crude inventories posted another draw last week, falling by 2.4 million barrels to 418.3 million barrels, according to the latest DOE report. Inventories are now 6% below the five-year seasonal average, underlining a persistently tight supply picture as we move into the post-peak demand season.

While the draw was smaller than last week’s 6 million barrel decline, the trend remains consistent with seasonal patterns. Current inventories are still well below the 2015–2022 average of around 449 million barrels.
Gasoline inventories dropped by 1.2 million barrels and are now close to the five-year average. The breakdown showed a modest increase in finished gasoline offset by a decline in blending components – hinting at steady end-user demand.
Diesel inventories saw yet another sharp move, falling by 1.8 million barrels. Stocks are now 15% below the five-year average, pointing to sustained tightness in middle distillates. In fact, diesel remains the most undersupplied segment, with current inventory levels at the very low end of the historical range (see page 3 attached).
Total commercial petroleum inventories – including crude and products but excluding the SPR – fell by 4.4 million barrels on the week, bringing total inventories to approximately 1,259 million barrels. Despite rising refinery utilization at 94.6%, the broader inventory complex remains structurally tight.
On the demand side, the DOE’s ‘products supplied’ metric – a proxy for implied consumption – stayed strong. Total product demand averaged 21.2 million barrels per day over the last four weeks, up 2.5% YoY. Diesel and jet fuel were the standouts, up 7.7% and 1.7%, respectively, while gasoline demand softened slightly, down 1.1% YoY. The figures reflect a still-solid late-summer demand environment, particularly in industrial and freight-related sectors.


-
Nyheter4 veckor sedan
Omgående mångmiljardfiasko för Equinors satsning på Ørsted och vindkraft
-
Nyheter2 veckor sedan
Meta bygger ett AI-datacenter på 5 GW och 2,25 GW gaskraftverk
-
Nyheter4 veckor sedan
Guld stiger till över 3500 USD på osäkerhet i världen
-
Analys4 veckor sedan
What OPEC+ is doing, what it is saying and what we are hearing
-
Nyheter2 veckor sedan
Aker BP gör ett av Norges största oljefynd på ett decennium, stärker resurserna i Yggdrasilområdet
-
Nyheter4 veckor sedan
Lyten, tillverkare av litium-svavelbatterier, tar över Northvolts tillgångar i Sverige och Tyskland
-
Analys3 veckor sedan
Brent sideways on sanctions and peace talks
-
Nyheter3 veckor sedan
Ett samtal om koppar, kaffe och spannmål