Oil prices caught between a $70 summer and growing surplus fears
(Bloomberg) — Oil traders are grappling with a tension — there's a growing chorus of warnings about the market weakening later this year and into 2026, but for now prices are holding strong near $70 a barrel.
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France's TotalEnergies SE last week warned the market is facing abundant supply as the OPEC+ group unwinds output curbs, even as slowing global growth weighs on demand. Norway's Equinor ASA said its new Johan Castberg field is operating at full pelt, with a Brazilian offshore asset starting soon, a reminder of additional barrels expected from outside the producer group.
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Both the International Energy Agency and the US Energy Information Administration earlier this month bolstered their estimates for the surplus they see next year. The two widely-followed forecasters expect supply to eclipse demand by the most since the pandemic, with the IEA's projection at 2 million barrels a day.
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A surplus that pushes prices lower will help tame inflation, hurt high-cost producers and likely please US President Donald Trump who has called for lower prices since taking office.
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It's a stark contrast with the here and now, where inventories at key storage hubs remain low, reflected in a bullish market structure that indicates tight supplies. Profits from turning crude into fuels are also far above seasonal norms, underpinning demand for crude.
'One of the issues that has been supporting oil has been the seasonal strength of the summer months,' Francisco Blanch, head of commodities and derivatives research at Bank of America Corp. said in a Bloomberg TV interview. 'Second half of the year the surplus is going to be close to 200 million barrels,' which will ultimately weigh on prices, he added.
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While most of the IEA's revision of next year's outlook centered on output additions by the Organization of the Petroleum Exporting Countries and its allies, who will meet to discuss output levels in early August, there were also some less obvious drivers. Forecasts for the supply of biofuels, which compete with conventional oil, are about 200,000 barrels a day higher than two months ago in the agency's estimates.
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The US government now sees global oil supplies about 2.1 million barrels a day higher in the fourth quarter of this year than the first, the biggest increase it has seen over the period since February. The two bodies' forecasts constitute an important element in traders' evaluations of how the market will unfold.
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For now, signs of robust demand remain.
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Leading oil trader Vitol Group said last week that jet fuel demand has been steadily climbing, with flight numbers reaching all-time highs. US weekly oil-demand figures are the highest this year. That data has been revised higher in final monthly readings for four of the last five periods where complete figures are available.
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CTV News
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Canada is a leader in AI research, but a laggard in adoption: minister
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Vancouver Sun
an hour ago
- Vancouver Sun
Trump's Golden Dome missile-defence push on Canada leaves Ottawa with few good options
Washington, D.C. — U.S. President Donald Trump wants a Golden Dome of missile defence over the United States, and if you're thinking this sounds familiar, you'd be right. Back in the 1980s, Ronald Reagan's Strategic Defense Initiative, aka Star Wars, also aimed to develop a space-based and layered defence system to knock out any incoming strikes. It didn't work out. The space-based part proved elusive, but technology has now advanced enough to make more of it feasible, at least in theory. Trump envisions a system that includes space-based weaponry that can take out missiles — ballistic and hypersonic — and he wants Canada to help pay for building this defensive wall over North America. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. 'I told Canada, which very much wants to be part of our fabulous Golden Dome System, that it will cost $61 Billion Dollars if they remain a separate, but unequal, Nation, but will cost ZERO DOLLARS if they become our cherished 51st State,' the president posted on social in May. Since then, the quoted price has gone up to US$71 billion. Ottawa has acknowledged that discussions with the U.S. are underway, but they're happening against a backdrop of strained U.S.-Canada relations over defence spending and a trade war. With pressure on Prime Minister Mark Carney to cool Washington's belligerence, the Golden Dome's feasibility as a technology may matter less than the symbolism of Canada's willingness to collaborate with the White House. And none of the options for Canada, whether it's spending tens of billions of dollars to buy into a risky initiative or spurning a testy and vindictive president, are painless. 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Today, Canada helps support GMD and NORAD operations by hosting sensors for early warning and tracking of missiles, and Trump has suggested that Canada join Golden Dome, a project he very optimistically says will take three years, with an entry price of US$71 billion. That's well over this year's Canadian defence budget of approximately $62.7 billion, but it's unclear how long Ottawa would have to pay the ticket price. Washington and Ottawa have been involved in volatile trade talks in recent weeks, with Trump stating on Friday that there is no deal likely with Canada and that more tariffs are likely coming on Aug. 1. So how is Carney likely to respond to the Golden Dome invite? Giltner doesn't see how participating in Golden Dome would strategically benefit Canada, because, in addition to the high cost, it would mean being party to a 'more fraught strategic environment.' But Peters said it is in Canada's national interest because inbound threats would likely fly over Canadian territory and may not only be directed at the U.S. He believes most Canadians would feel better knowing a defence system could thwart any such attack. O'Hanlon, however, sees the need for a balancing act. 'It would make sense to be involved in this enough that we can do joint planning and that Canada would get some enhanced consideration as we think about options for protection,' he said. At the same time, the high cost, given Canada's military budget, means Ottawa 'wouldn't want to get so caught up in this that (they) missed out on the opportunities to improve (their) ground forces.' Canada, he says, should aim to be 'a substantial partner in this within reason.' National Post tmoran@ Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
National Post
an hour ago
- National Post
Trump's Golden Dome missile-defence push on Canada leaves Ottawa with few good options
Washington, D.C. — U.S. President Donald Trump wants a Golden Dome of missile defence over the United States, and if you're thinking this sounds familiar, you'd be right. Back in the 1980s, Ronald Reagan's Strategic Defense Initiative, aka Star Wars, also aimed to develop a space-based and layered defence system to knock out any incoming strikes. Article content It didn't work out. Article content Article content Article content The space-based part proved elusive, but technology has now advanced enough to make more of it feasible, at least in theory. Trump envisions a system that includes space-based weaponry that can take out missiles — ballistic and hypersonic — and he wants Canada to help pay for building this defensive wall over North America. Article content Article content 'I told Canada, which very much wants to be part of our fabulous Golden Dome System, that it will cost $61 Billion Dollars if they remain a separate, but unequal, Nation, but will cost ZERO DOLLARS if they become our cherished 51st State,' the president posted on social in May. Since then, the quoted price has gone up to US$71 billion. Article content Ottawa has acknowledged that discussions with the U.S. are underway, but they're happening against a backdrop of strained U.S.-Canada relations over defence spending and a trade war. With pressure on Prime Minister Mark Carney to cool Washington's belligerence, the Golden Dome's feasibility as a technology may matter less than the symbolism of Canada's willingness to collaborate with the White House. And none of the options for Canada, whether it's spending tens of billions of dollars to buy into a risky initiative or spurning a testy and vindictive president, are painless. Article content Article content Article content Article content U.S. missile defense currently includes the Ground-based Midcourse Defense (GMD) in Alaska and California, which is designed to intercept ICBMs in space and has a 55 per cent test success rate. The Patriot system defends battlefield and critical sites against shorter-range missiles closer to their targets, and the mobile THAAD system (Terminal High Altitude Area Defense) provides regional defence against various missile threats, also closer to their targets. The naval Aegis system, meanwhile, offers effective naval-based missile interception – and the Patriot, THAAD and Aegis all generally outperform GMD. Article content Golden Dome aims to integrate all of the above — the ground and sea-based technologies — while adding a new space-based layer of satellites equipped with sensors and interceptors to detect incoming threats and take them out at various stages of their trajectories. Article content This would improve U.S. missile defence beyond just dealing with potential ballistic missiles coming from rogue nations such as North Korea or Iran, said Patrycja Bazylczyk, a research associate with the Missile Defense Project at the Washington-based Center for Strategic and International Studies CSIS.
