| Commoditiy | Price | Weekly Change | 50day-Ave | 100day-Ave | 200day-Ave |
|---|---|---|---|---|---|
| Brent ($/b) | 64.96 | 0.00 | 67.42 | 71.69 | 73.17 |
| US WTI ($/b) | 62.07 | 0.12 | 64.01 | 68.20 | 69.69 |
| ICE Gasoil ($/MT) | 616.75 | 15.00 | 630.64 | 670.47 | 674.36 |
| Jet CIF NWE ($/MT) | 665.07 | 4.19 | 676.26 | 710.43 | 715.05 |
The oil market stayed relatively firm throughout last week and finished the week slightly up. There has been some fresh news about a possible nuclear deal with Iran. The market started last week strong on news of a temporary cut in US/China tariffs to allow for more negotiations and for most of the week, Brent has been around 65 \$/b. Brent reached a low of 63.43 \$/b after Trump claimed that the US had reached a deal with Iran to restrict its nuclear program, then rallied again at the end of the week after the Iranians cast doubt on the degree of progress, so Brent ended the week around 65 \$/b.
The International Energy Agency published their monthly report last week where they made some significant upward revisions to demand numbers. Demand estimates for 2024 and 2025 have been revised up by 400 kb/d to 103.2 and 103.9 mb/d respectively, while 2026 has been increased by 500 kb/d to 104.7 mb/d. Non-OPEC supply figures have been left unchanged except for a 100 kb/d cut to the 2026 supply estimate. The increase in demand has been as a result of a revision to its estimate of oil consumed last year, which has provided the baseline for 2025 and 2026 through the year-on-year increments applied to that baseline. However, the revisions have led to an increase in the amounts the IEA estimates OPEC needs to produce to balance the market (the call on OPEC). For 2025 the figure has increased by 300 kb/d from 26.4 to 26.7 mb/d and for 2026 the call has gone up by 500 kb/d from 26.0 to 26.5 mb/d. While these upward revisions, sound very positive for oil, they must be compared to the IEA’s estimate of April OPEC output of 27.42 mb/d, which suggests that market will be oversupplied this year even before the increases agreed for May and June have come through. On top of that, there is now a seemingly realistic prospect of more Iranian crude coming into the market later this year and adding further to OPEC supply.
There are some economic data releases this week including the Chinese retail and industrial production which was released overnight. China’s industrial output expanded 6.1% year on year April, exceeding expectations but below the previous month’s data. In contrast Retail consumption disappointed versus economists’ expectations showing weakening confidence amongst households and negative for oil.
On the supply side, as we head towards the end of May, questions about OPEC+’s July output will surface, and we may hear some news from OPEC+ delegates on what the thinking is there. Last week, Brent found support around 63 \$/b. If the 62 to 63 \$/b area continues to hold there is potential for Brent to test further upside, but if those levels fail, for whatever reason, the market might test 60 \$/b again before long.
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