Brent: Supply risks keep prices elevated – ING

ING analysts Ewa Manthey and Warren Patterson note that ICE Brent is trading just below $90/bbl, supported by Middle East tensions and attacks on vessels in the Strait of Hormuz. They highlight increasingly bullish speculative positioning in Brent and WTI, alongside rising US drilling activity and higher EIA crude output forecasts for 2026 and 2027.

Brent supported by geopolitics and positioning

"ICE Brent traded just below $90/bbl in early Asian trading, extending Monday’s gains. Prices remained supported by renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz, raising concerns over regional supply disruptions and complicating prospects for a US-Iran deal. Several vessels, including ships linked to Abu Dhabi National Oil Co., were reportedly targeted in the waterway late last week."

"Speculative positioning turned more bullish. Money managers increased their net long position in ICE Brent by 76,026 lots to 240,748 lots as of last Tuesday, the largest bullish position since early June 2026. The increase was primarily driven by fresh long positions, with gross longs rising by 51,818 lots week-on-week."

"Meanwhile, US drilling activity continued to expand. The US oil rig count rose by one to 455 active rigs last week, marking a third consecutive weekly increase, according to Baker Hughes. The count is now 43 rigs higher than a year ago and at its highest level since May 2025."

"Drilling activity has trended higher since the start of the US-Iran conflict in late February. The EIA estimates US crude oil production will average 13.8mb/d in 2026, up from 13.6mb/d in 2025, before increasing further to 14.2mb/d in 2027."