It's Not Bad, But It's Not Great Either
Oil market fundamentals are not as tight as we would like to start Q3.
Oil prices today are trading at the high end of the range. This is fueled by:
Better-than-expected global oil demand (estimates show a range of 104.3 million b/d to 105 million b/d).
Lower-than-expected OPEC+ crude exports (no material increase since March 2025).
Slowing US crude oil production (latest estimate shows ~13.05 million b/d real-time).
Very low distillate storage, which is keeping the entire refining margin complex afloat.
Geopolitical tensions (now arising in Iraq, which is reducing crude production by ~250k b/d to ~300k b/d).
In our experience, the oil market seldom trades at the equilibrium for long. Global oil balances might not be steeply building like the bears are expecting, but the lack of more visible draws should make the bulls worry.
In this article, I'm going to give you an update on global oil market fundamentals and where we are headed.
It's not bad, but it's not great either...
That's the oil market in a nutshell: the bulls don't have a great case for prices to meaningfully move higher, and vice versa is also true for the oil bears.