Oil: Market expectations diverge from data – Commerzbank

Commerzbank’s Commodity Research team, led by Norman Liebke and colleagues, notes that Oil prices have fallen as optimism grows over US–Iran talks and a potential reopening of the Strait of Hormuz. The bank highlights upcoming EIA forecasts, possible OPEC+ quota adjustments, and argues that current price weakness reflects expectations of a supply glut rather than confirmed evidence of oversupply.

Prices fall on shifting expectations

"Given the ongoing uncertainty, the oil price is likely to continue reacting strongly to new developments regarding the situation in the region."

"Following the framework agreement, production is likely to have stabilized in June, so the EIA is expected to raise its forecasts for oil supply in the second half of the year slightly."

"Even if a significant quota increase remains unlikely, OPEC+ is likely to yield to the pressure, at least in part."

"The price trend and the available data therefore do not align."

"The fall in oil prices is likely due more to expectations than to an actual supply glut."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)