Oil at $60 Priced In No Demand Growth This Year, Gunvor Says
Oil's slump below $60 a barrel during the worst of last week's rout had priced in zero demand growth this year, and was probably an overreaction, according to the head of research at trader Gunvor Group.
Brent futures fell as low as $58.40 on Wednesday — almost $25 below their 2025 high — as the escalating trade war between the US and China sapped confidence across global markets. The slide was compounded by a surprisingly large output increase by the Organization of the Petroleum Exporting Countries and its allies.
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Miami Herald
3 hours ago
- Miami Herald
Large oil producers around the Persian Gulf ramp up exports
LONDON -- As fighting between Israel and Iran intensifies, the major oil producers around the Persian Gulf, including Saudi Arabia, have been racing to load tankers with exports, possibly as a hedge against future disruption. These increases are occurring despite jumps in insurance costs and shipping rates and hazards like jamming of navigation systems. Analysts say these producers are preparing for the possibility that fighting could spread to oil export installations, which have been largely spared so far, or that shipping could be disrupted through the Strait of Hormuz, the narrow passageway from the Persian Gulf through which a large portion of both oil and liquefied natural gas travel. 'They want to make sure that they reduce the risks,' said Homayoun Falakshahi, head of crude oil analysis at Kpler, a research firm. 'That means export as much as possible, as soon as possible.' Kpler estimated that Saudi Arabia's oil exports had increased 16% through mid-June from the same period in May. Other producers in the region including the United Arab Emirates and Iraq have boosted shipments around 10%, Falakshahi said. The intent appears to be to put as much oil as possible on tankers and send it out of the Persian Gulf, mostly to Asian countries such as China, which are, increasingly, the main customers for the oil producers. Although countries like Saudi Arabia and the United Arab Emirates have improved their ties to Iran in recent years, having oil on tankers provides a buffer in case fighting spreads to their lifeblood industry. Even Iran, despite being the target of intense bombing by Israeli jets, appears to have managed a modest recent increase in exports, Kpler said. Because of U.S. sanctions on Iran, nearly all of its exports go to China. Prices for Brent crude, the international benchmark, have risen about 10% since June 13, when the conflict between Israel and Iran escalated. They dropped more than 3% Friday, to about $76 a barrel, after President Donald Trump said he would delay his decision on U.S. involvement for two weeks. There have been no serious disruptions to oil exports from the Gulf, but there are signs of increased concern about operating there. The number of empty tankers in the Persian Gulf ready to take on new cargoes has declined sharply, Falakshahi said, potentially indicating a future fall in exports. Marcus Baker, global head of marine and cargo at insurance broker Marsh McLennan in London, said war risk insurance for shipowners that did business in areas like the Persian Gulf had risen about 60% since the conflict started last week. Before, rates had been at modest levels. 'People are just a little bit nervous,' Baker said. Freight rates on large tankers from the Gulf to China have also risen about 50%, Kpler reported. So far, these added costs are not enough to deter shipping by themselves, Baker said, but there are increasing concerns about the welfare of ships' crews, who have been under stress from conflicts and other disruption in this decade, including monumental port delays during the pandemic. 'Crew welfare, crew safety, mental health of crew has become a big issue in the last few years,' he said. Shipping experts also report an increase in interference in the area with the satellite navigation systems used by ships to report their positions. This jamming, which has been unusually intense, is potentially dangerous because it can cause ships to appear in false locations on tracking systems and make it more difficult for owners to follow them. This article originally appeared in The New York Times. Copyright 2025
Miami Herald
17 hours ago
- Miami Herald
Top analysts reset oil price targets amid Middle East chaos
The world has gotten a bit crazy in 2025. An ongoing global trade war has sparked worries over worldwide economic growth, and now, Israel and Iran are locked in a battle with missiles flying back and forth, threatening global oil supplies. The potential for a major energy crisis to develop because of the Iran and Israel conflict has caused Brent Crude and West Texas Intermediate oil prices to surge, and in turn, that's created an entirely new threat to the economy. Don't miss the move: Subscribe to TheStreet's free daily newsletter The potential for the battle in the Middle East to spread, potentially shutting off oil seaborne transports through the Strait of Hormuz, and possibly removing Iranian oil from the global market, has lifted Brent crude and WTI crude per barrel prices by 18% to $79 and 21% to $75 this month. The situation has captured the attention of Citigroup, JPMorgan, and Goldman Sachs' oil analysts, leading them to reset their oil price targets. CFOTO/Getty Images President Donald Trump has announced a string of harsher-than-expected tariffs this year to rekindle US manufacturing. The moves, which include 25% tariffs on Mexico, Canada, and autos, plus a 30% tariff on China and a 10% baseline tariff on all imports, have forced economists to rethink their global projections for economic growth this year. Related: Forget tariffs, Fed interest rate cuts may hinge on another problem For instance, earlier this month, the World Bank reduced its worldwide gross domestic product, or GDP, forecasting 2.3% from 2.7% previously, citing tariff uncertainty. Contributing significantly to the reduced outlook is a major downgrade of U.S. growth to 1.4% from 2.3%. The World Bank lowered its U.S. forecast to 1.6% in 2026, down from 2%. The Federal Reserve also anticipates the slowing growth in the US because of tariffs' bite. The Fed updated its closely watched Summary of Economic Projections on June 18. It expects unemployment to increase to 4.5% from 4.2%, and projects that Personal Consumption Expenditures (PCE) inflation will climb to 3% this year, up from expectations in March for 2.7% inflation. Fed officials expect U.S GDP growth to be just 1.4% in 2025, down from 1.7% in March, and well below the 2.5% GDP growth the US economy delivered in 2024. In China, the World Bank expects that slowing activity due to higher tariffs will reduce GDP to 4.5% in 2025, down from 5% in 2024. In 2026, it expects GDP to fall further to 4%. The economic situation could get even more uncertain if Israel and Iran's conflict continues to prop up crude oil prices. Oil prices can significantly impact inflation, directly and indirectly, further crimping consumer and business spending. We're already seeing concerning signs that higher oil prices are translating into higher prices at the pump for gasoline. "WTI crude oil $77/bbl, the national average price of gasoline is now $3.21 per gallon, and could by next week climb to its highest ever while President Trump has been in office ($3.25/gal) due to Middle East tensions," wrote GasBuddy's Patrick De Haan on X. Roughly 18 million to 19 million barrels of oil flow through the Strait of Hormuz daily, representing 20% of global oil consumption, including crude, condensates, and fuel. Its proximity to Iran means it could become an oil chokepoint if Iran acts to block it. The possibility of that happening is "under serious consideration," said Esmail Kosari, an Iranian parliament member and IRGC general, on June 15. More Economic Analysis: Federal Reserve prepares strong message on long-term interest ratesMassive city workers union approves strikeAnalyst makes bold call on stocks, bonds, and gold Iran's oil production and its ability to export oil to its largest consumer, China, may also be significantly impaired. Iran is OPEC's third-largest member, producing about 3.3 million barrels per day. Citi estimates that if the conflict disrupts 3 million bpd for multiple months, crude oil prices could reach $90 per barrel, up from $75 now, and the low-to-mid $60s before Israel attacked Iran over its nuclear development program. JPMorgan's analysts believe that shutting the Strait of Hormuz could catapult crude oil prices to an eye-popping $120 to $130 per barrel. Goldman Sachs, meanwhile, believes the conflict creates a risk premium of about $10 per barrel. In one scenario, Goldman Sachs' analysts say that damage to Iran's export infrastructure that reduces Iran's supply by 1.75 million bpd "before gradually recovering," with OPEC+ production offsetting roughly half of the reduction, would lead to Brent crude oil peaking "just over $90/bbl." Goldman Sachs, however, expects that the increase would prove temporary, with prices declining "back to the $60s in 2026 as Iran supply recovers." However, the situation would be worse if the Strait of Hormuz were blocked for an extended period. "While an interruption of trade through the Strait of Hormuz, through which nearly 1/5 of global oil production flows, appears much less likely, there is focus from investors and policymakers on this risk, because core OPEC+ producers may be unable to deploy spare capacity in this extreme tail scenario. Based on our prior analysis, we estimate that oil prices may exceed $100/bbl in an extreme tail scenario of an extended disruption." Related: Veteran fund manager sends dire message on stocks The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
17 hours ago
- Yahoo
'November 2021 All Over Again' For Bitcoin? Veteran Trader Sparks Debate With Haunting Chart
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Bitcoin may be set to replicate a tumultuous time in its history, according to veteran commodities trader Peter Brandt. 'November 2021 all over again?' Brandt said last weekend on X, sharing Bitcoin's weekly-candle chart. Much like today, in November 2021 Bitcoin had just surged to new all-time highs. For many cryptocurrency market participants, it felt like the asset was unstoppable. Just as many are predicting a $1 million price for Bitcoin today, many at the time were betting on the asset continuing its run to $100,000. Don't Miss: — no wallets, just price speculation and free paper trading to practice different strategies. Grow your IRA or 401(k) with Crypto – . But what followed was far from what many anticipated. Instead of a straight run to $100,000, Bitcoin kicked off a massive correction culminating in a nearly 80% drop from its 2021 high of $69,000 to trade at about $15,600 almost a year later. Brandt's weekly-candle chart highlights that Bitcoin could be forming the same bearish double-top chart pattern it did in 2021. A repeat of the same price action could see the asset tank as low as the $25,000 price point from its high of $112,000. Could this time be different? Responding to Brandt, Grayscale Head of Research Zach Pandl said unlike 2021, the Federal Reserve 'is more likely to start cutting rates than raising rates.' This remark comes as many view rapid interest rate hikes from the Fed starting in Q1 2022 as one of the major catalysts for the ensuing cryptocurrency bear market. The central bank had embarked on this course of action to fight inflation. Unlike in 2021, inflation presently appears to be steadily inching closer to the Fed's 2% target, making interest rate cuts more likely. It also helps that lower interest rates align with President Donald Trump's policy agenda. Trending: New to crypto? on Coinbase. Pandl is not alone in thinking this time could be different for Bitcoin. Crypto analyst 'AetherX Capital' said the asset's fundamentals are significantly better. 'Bitcoin's fundamentals have never been better,' they said. 'From a technical perspective, there's no reason to worry yet.' Fellow prominent crypto trader 'IncomeSharks' was even more optimistic. They said it would likely be 2021 all over again for Bitcoin. While the tail end of 2021 proved to be underwhelming, the asset had surged as much as 138% within the year. In the near term, Bitcoin is ranging between its all-time high at $112,000 and $100,000 amid macroeconomic uncertainty and escalating tensions in the Middle East. In a Monday note, MEXC Chief Operating Officer Tracy Jin said that all eyes are on the Strait of Hormuz. 'About 20% of the world's oil (20 million barrels) goes through this narrow stretch of land, and any kind of conflict could lead to a sharp rise in energy prices,' Jin said. 'Experts are saying that the price of Brent could go above $115, which might add 70-90 basis points to inflation by the end of the year. That sort of supply shock would probably lead to a risk-off move, which would put pressure on both crypto and equities.' Read Next: A must-have for all crypto enthusiasts: . Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Image: Shutterstock This article 'November 2021 All Over Again' For Bitcoin? Veteran Trader Sparks Debate With Haunting Chart originally appeared on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
