#oil-prices

#oil-prices

Futures are trading higher on Wednesday as we reach the midpoint of the last full trading week of the year. Sellers once again took their toll on two of the major indices, while the Nasdaq squeaked out a minimal gain after being down around the noon hour. The Dow Jones Industrial Average closed down 0.62% at 48,114, while the S&P 500 was last down 0.44% at 6800. The Nasdaq pulled out a small win for the Bulls, finishing the session at 23,111, up 0.23%.

Oil traded higher today, although it remained close to its lows for the year. The market could continue to see some upside as traders react to increasing geopolitical tensions in Eastern Europe. The latter continues to affect energy infrastructure in the region and could impact oil supply levels in the near term. Additionally, the region continued to grapple with the lack of a breakthrough in peace talks.

Low oil and natural gas prices are taking a toll on the industry as drilling activity is falling in Western Canada and is expected to slide further in 2026. North American oil prices remain below $60 US per barrel, after climbing to more than $80 in January. As a result, oil and gas companies are cutting costs, and total capital spending is expected to decline by 5.6 per cent this year and a further 2.2 per cent in 2026,

WTI crude oil futures retreated below USD 61 per barrel on Tuesday, as persistent oversupply fears overshadowed recent OPEC+ policy decisions. Forecasts of a significant global surplus by 2026, potentially as high as 4 million barrels per day, could continue to weigh on sentiment and push prices lower. Surging output from non-OPEC+ producers, including the United States, Brazil, and Canada, could drive the expected supply glut.

The upward move in oil comes as investors digested signs of trade relief following recent remarks by U.S. President Donald Trump, alongside stronger-than-expected Chinese trade data. According to Reuters, the rebound was further supported by a series of potential geopolitical flashpoints, from rising tensions in Ukraine to renewed risks of escalation in the Middle East, that together injected a fresh risk premium into energy markets.

Oil prices declined on Friday, after settling around 1.6% lower in the previous session, as the market's risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza. "Finally having some kind of peace process in the Middle East is lowering the shoulders a little bit," said Bjarne Schieldrop, chief commodities analyst at SEB. This could ease fears about crude carriers passing through the Suez Canal and the Red Sea, he said.

Chinese markets continued to show resilience today, with improved PMI surveys offering a glimmer of hope for the broader economy. The latest manufacturing PMI climbed to a six-month high of 49.8, edging closer to the key 50 threshold after a six-month period of contraction. The data, coupled with renewed optimism around Chinese tech stocks, helped the Hang Seng rise 0.9%, with traders increasingly viewing Chinese AI names as a means to diversify from the Mag7 names.

Higher U.S. tariffs against a host of trade partners went into effect on Thursday, raising concern over economic activity and demand for crude oil.

To put it plainly, what I see tells me the oilfield services market will be softer than I previously expected over the short to medium term. Oil producers and countries are cutting back spending more dramatically than current oil prices would normally necessitate.

Fuel prices in the UK are rising due to global instability, with Brent crude oil prices increasing from $68 to $78 per barrel in July, leading to higher retail costs.

Despite the ongoing uncertainties in the market, including geopolitical tensions and tariffs, U.S. equities are bouncing back, showing signs of resilience under current conditions.

President Trump announced a ceasefire between Israel and Iran, easing fears of an oil supply crisis and eliciting mixed reactions in stock markets.

The exact figure of $110 is based on the assumption that oil tanker traffic through the Strait of Hormuz would decrease by half for a month.

The bombing of Iran's nuclear facilities has caught traders off guard, as financial markets showed unexpected calm due to uncertainties surrounding future retaliation and the timing of the strikes.

Traders are in a largely risk-off mood, weighing the chances of further escalation in the Middle East and possible Iranian retaliations.

Expect oil to open with a sharp 7-10% gap up as risk premiums surge. But don't be fooled, this may not last...

Wael Sawan emphasized the careful management of shipping in the Middle East due to rising tensions, highlighting the significant uncertainty in the region caused by recent conflicts.

"The paradox of the escalating Middle East conflict is that the Tehran regime is one of Russia's few allies, however it is not Moscow that is being harmed by the situation, but Kyiv."

European stock markets are opening in the red, with London’s FTSE 100 down by 0.5% and Germany’s DAX dropping nearly 1% amid geopolitical tensions.

We have, in the past, supported Israel when there have been missiles coming in. I'm not going to comment on what might happen in the future, but so far, we haven't been involved, and we're sending in assets to both protect ourselves and also potentially to support our allies.