Oil: Supply disruptions raise deficit risks – ING
ING analysts Warren Patterson and Ewa Manthey note Oil prices have eased, with Brent crude ending largely flat as US-Iran talks remain in deadlock and Russian port infrastructure escapes major damage. EIA data showed a large US crude inventory build, while International Energy Agency (IEA) and OPEC (Organization of Petroleum Exporting Countries) forecasts diverge on 2026 demand and supply, highlighting growing deficit risks and Middle East disruption concerns.
Inventories surge as deficits loom
"Oil prices edged lower through much of yesterday’s session; Brent crude ended the day largely flat. There was little in the way of fresh developments between the US and Iran, with both sides remaining in a deadlock. Meanwhile, the latest large drone attack on Russia’s Novorossiysk port appears to have spared oil infrastructure, with no reports of damage to oil terminals as of now."
"The EIA’s weekly report was fairly bearish, with US commercial crude oil inventories increasing by a significant 17.42m barrels over the last week. This is the largest weekly increase since January 2023. Total crude stocks actually rose by 11.31 million barrels once the 6.12 million barrels of SPR releases are included."
"The International Energy Agency expects the global oil market to be in a 1.8m b/d deficit in 3Q26, which has grown since last month, given the renewed disruptions in the Middle East. While global oil supply grew by 2.4m b/d in July, it remains 6.3m b/d lower year-on-year, and full-year oil supply is now expected to fall by 4.3m b/d in 2026. Aggressive downward revisions were also made to demand."
"The IEA now expects global oil demand to fall by 1.6m b/d YoY in 2026 due to Persian Gulf disruptions and elevated fuel prices."
"OPEC also released its latest monthly report yesterday. The group remains more upbeat when it comes to demand, expecting global demand to grow by 580k b/d YoY. This seems fairly optimistic given the price levels that we have seen refined products trading this year."
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