The Commodities Feed: Oil falls further
At a Glance
Per the full note [ING Think], oil's fourth consecutive decline reflects market pricing of a full Strait of Hormuz reopening after the US-Iran agreement, with WTI touching its lowest since March and Brent below $83/bbl. The desk highlights that this supply-risk unwind is reinforced by China's refinery throughput falling 9.1% YoY to a three-year low, while US SPR stocks at 340mn barrels mark a 40-year trough, suggesting potential rebuilding ahead. No consensus data is available from internal coverage, and no upcoming calendar events are flagged, leaving the focus squarely on demand-side metrics and geopolitical follow-through.
Key Takeaways
- 01Oil prices fell for four consecutive sessions on Strait of Hormuz reopening expectations; WTI at lowest since March, Brent below $83/bbl.
- 02China refinery throughput fell 9.1% YoY to 53.7mt in May, the lowest since 2022, on weak crude imports.
- 03US Strategic Petroleum Reserve declined to ~340mn barrels, lowest since 1983, with potential for slower drawdowns and stock rebuilding.
- 04Aluminium prices fell 4.4% to ~$3,380/t on easing supply concerns, while natural gas rose on LNG demand and cooler weather caps.
Full Analysis
What the desk is arguing
The desk argues that oil's selloff is structurally driven by the unwinding of geopolitical risk premium following the US-Iran deal, rather than a pure demand scare. The commentary notes that ICE Brent is trading below $83/bbl, more than 30% below its conflict peak, as expectations for a full Strait of Hormuz reopening shift the supply calculus.
Supporting this view, the note cites Chinese refinery throughput dropping 9.1% YoY to 53.7 million tonnes in May, the lowest since 2022, while US SPR inventories sit at ~340 million barrels—the lowest since 1983—implying that further withdrawals may slow as rebuilding begins. The desk implicitly rejects the alternative read that this is a global demand collapse, instead framing it as a normalization of risk and supply.
What the calendar says
No high-impact events are scheduled in the next 30 days, leaving price action to be driven by ongoing supply normalization signals.
Market Implications
Watch for continued downside in Brent below $80/bbl if the Strait of Hormuz fully reopens and Chinese import data remain weak. A break below $75/bbl would expose the March lows, with the SPR rebuild offering a potential floor.
From the original
Articles The Commodities Feed: Oil falls further 08:20 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Oil prices continued to decline on growing expectations that the Strait of Hormuz could reopen. Meanwhile, the US Strategic Petrol
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The Commodities Feed: Oil under pressure amid rebound in Middle East flows
The desk sees the current downturn in crude oil prices, particularly the ICE Brent nearing $70/bbl, as a reflection of increased flows through the Strait of Hormuz and a normalization of supply dynamics. Per the full note from ing-think, this leads the prompt market to move into contango, signaling an oversupplied condition. This shift in supply coincides with continued releases from the U.S. Strategic Petroleum Reserve (SPR), which has exerted additional pressure on prices. Since product inventories in key regions have seen varied changes, traders should also be attentive to the fundamentals of refined products, especially as market behavior suggests potential buying on dips. Moreover, the recent data indicates that ARA and Singapore petrol stocks are falling but remain below the five-year average, indicating a tightening backdrop despite the fundamentals suggesting bearish trends in crude. We are likely nearing a pivotal point where the interplay between supply normalization and inventory trends could swing market sentiment accordingly.