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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 33 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 33 institutional desks. No promotion.
The desk views the recent easing in oil prices as a significant signal regarding the ongoing dynamics in global supply chains, specifically from the Persian Gulf region. As per the full note by ING, oil prices saw a decline of 1.9%, dropping below $90 per barrel amid heightened geopolitical tensions with Iran. This decline could reflect an incremental recovery in oil supply flows, where tanker crossings through the critical Strait of Hormuz are increasing, and reports indicate Persian Gulf output is around 65% of pre-war levels. As the US energy sector moves toward completion of its strategic petroleum release, the diminishing buffer from the Strategic Petroleum Reserve (SPR) emphasizes the delicate balance in oil supply that traders must navigate moving forward.
The desk frames this as a pivotal moment for oil markets, balancing geopolitical tensions against improved supply dynamics. Per the full note by ING, current flows out of the Persian Gulf are approximately 13 million barrels per day, with around half channeled through the Strait of Hormuz. This hints at resilience in supply that could further pressure oil prices despite ongoing friction between the US and Iran.
Noteworthy is the comment on the SPR, where the US has signaled no plans for additional releases post the current allocation of 172 million barrels. With the SPR holding just under 308 million barrels, and operational minimums estimated to be higher than reported, there are concerns that the cushion it provides may be overstated.
Given our firm consensus target for commodity prices, the current situation aligns with forecasts from key players, with jpmorgan suggesting a target of 1.10 for March 2026 and bofa marking a lower target at 1.04 for the same tenor. This positioning reinforces that while there is moderate bullish sentiment, constraints remain significant, particularly around geopolitical developments.
Firms like jpmorgan and goldman showcase an optimistic outlook, expecting price recoveries if supply constraints are alleviated. In contrast, bofa stands at a more cautious stance, anticipating lower price levels due to the geopolitical risks surrounding the region. Observers should also keep an eye on USD/CAD movements as they directly correlate with oil price fluctuations, reflecting shifts in currency markets driven by energy prices.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
Market implications
Traders should monitor oil’s ability to hold above $90 per barrel, which may set the tone for the coming weeks. Significant trading volumes are expected if supply recovery persists, particularly as the US completes its current SPR allocation, potentially influencing broader risk sentiment across commodity markets.
Risks to this view
A substantial escalation in US-Iran tensions or unexpected geopolitical events could reverse the current bullish sentiment in oil markets. Additionally, a surge in SPR releases or further disruptions in global supply could exacerbate price volatility, impacting trader positioning and forecasting.
Articles The Commodities Feed: Oil slips as more crude flows out of Persian Gulf Published 03:48 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Oil prices eased despite US–Iran tensions remaining elevated, helped by early indications that Persian Gulf supply is beginning to recover Warren Patterson and Ewa Manthey Energy – Middle distillate market sees further tightening Oil prices came under pressure yesterday, with ICE Brent settling 1.9% lower on the day, taking it back below $90/bbl. This weakness comes despite little improvement in tensions between the US and Iran. There are signs of an increase in oil flows through the Strait of Hormuz.
Ship tracking data shows that tanker crossings have increased slightly. Though still in single digits, there are also reports that the shuttling of oil across the strait has resumed. This will not be detected by tracking data, given that transponders will be turned off.
However, the US energy secretary has said that around 13m b/d of oil is coming out of the Persian Gulf, with roughly half coming through the strait. The other half is using pipelines to bypass the strait. That would mean flows from the region are around 65% of pre-war levels.
The US also appears to have ruled out further releases from its strategic petroleum reserves (SPR), once the ongoing release of 172m barrels is complete. The SPR currently stands at a little under 308m barrels, and there’s growing concern over how much further this reserve could be tapped, given operational minimum levels. While the US Department of Energy has said the operational minimum is 70m barrels, others in the industry estimate this level to be higher, potentially in the region of 180–200 m barrels.
This suggests that the buffer the SPR offers is significantly less than what the headline number states. Middle distillate markets are set to remain tight, with Russia extending its ban on diesel exports until 1 September. Russia is the second-largest exporter of diesel, shipping more than 700k b/d in 2025.
However, Ukrainian drone attacks on Russian refineries have led to significant disruptions to the domestic fuel market, prompting steps by the government to ensure domestic supply. The ICE gasoil crack remains near record highs, trading above $70/bbl. The tightening in the market is reflected in inventory data.
The latest data from Insights Global shows that gasoil inventories in the ARA region fell by 221kt WoW, to 1.42mt, and are close to the lows seen in 2022. The increased tension in the Red Sea will also be concerning for European middle distillate markets, potentially leading to disruptions in middle distillate flows from Asia and the Middle East and requiring vessels to take the longer voyage around the Cape of Good Hope. Metals – Gold demand steady over the second quarter According to the World Gold Council, total gold demand (including OTC transactions) was unchanged year-on-year at 1,269 tonnes in 2Q 2026, as strong central bank purchases offset weaker investor demand through gold exchange-traded funds (ETFs).
Total demand reached 2,522 tonnes in the first half of the year, up 2% YoY. Gold ETFs recorded 45 tonnes of net outflows in the second quarter, reflecting growing inflation and interest rate expectations, along with a stronger US dollar. Central bank purchases increased 62% YoY to 289 tonnes in 2Q26, rebounding strongly from 1Q and remaining consistent with recent buying trends.
However, revised data showed that central banks added only 57 tonnes in 1Q26, 187 tonnes below the April estimate, marking the weakest first-quarter demand in more than a decade. As a result, central bank gold purchases in 2026 are now expected to be lower than in 2025. Jewellery demand declined 17% YoY to 278 tonnes in 2Q, the lowest level since the pandemic, as elevated gold prices and inflation continued to weigh on consumer affordability.
Agriculture – Black Sea grain concerns linger The wheat market remains nervous as attacks on cargo vessels near Ukraine's Black Sea ports intensified concerns over grain export disruptions. According to Russian officials, one vessel was damaged at Pivdennyi port, while two others were struck near Odesa. The incidents followed a Ukrainian attack on Russia's Taman port, raising concerns about the security of Black Sea shipping routes.
Russia and Ukraine together account for nearly 25% of global wheat exports, making any disruption to regional trade a significant risk to global supply. The latest escalation could delay shipments during the peak export season and further tighten global wheat supplies. Supply concerns have also been exacerbated by weaker harvest prospects in key producing regions.
This includes the US, Europe, and Australia, due to adverse weather conditions and limited fertiliser availability. The Ukraine Grain Association expects Ukraine’s grain and oilseed production to rise 1.2% year-on-year to 84.6mt for the 2026 harvest. Among major crops, the association expects total wheat output to rise 5.3% YoY to 23.7mt, whilst corn production could increase by 3.2% YoY to 32.1mt.
While production is expected to grow, there are risks to exports given the ongoing attacks on port infrastructure in the Black Sea. Wheat SPR Russia-Ukraine Red Sea Precious metals Persian Gulf Middle East Middle distillates Hormuz Grains Gold Gasoil Diesel shortage Black Sea Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.
Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Warren Patterson Head of Commodities Strategy Warren Patterson is Head of Commodities strategy based in Singapore. He joined the bank in April 2016 and covers the entire commodities complex. Previously, he worked at a commodities trade house… Ewa Manthey Commodities Strategist Ewa Manthey is a Commodities Strategist based in London.
She joined the bank in September 2022 and covers the entire commodities complex, with a particular focus on the metals markets. She has… In this article Energy – Middle distillate market sees further tightening Metals – Gold demand steady over the second quarter Agriculture – Black Sea grain concerns linger
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