The power advanced was not proof against the broad sell-off in commodities over the previous week, Commonplace Chartered Financial institution Vitality Analysis Head Emily Ashford stated in a report despatched to Rigzone by the Commonplace Chartered workforce late Wednesday.
“The number of Kevin Warsh as the subsequent U.S. Federal Reserve chair, the notable ratcheting down of rhetoric between the U.S. and Iran, a enterprise as ordinary OPEC+ assembly, and discount within the U.S. tariff charges on India all acted towards oil costs,” Ashford added.
Within the report, Ashford highlighted that oil costs “fell from their peak of $71.89 per barrel on 29 January (a six-month excessive), again in the direction of $66.00 per barrel on 2 February, settling simply $0.38 per barrel greater than our machine studying mannequin SCORPIO’s forecast”.
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The Commonplace Chartered Financial institution analyst identified within the report that OPEC+ met just about on February 1, including that the assembly proceeded as Commonplace Chartered had anticipated.
“The November 2025 choice to pause manufacturing increments for Q1-2026 was upheld, with the communique suggesting this was as a result of seasonality,” Ashford stated within the report.
“The dedication to market stability was reaffirmed, with the group retaining the optionality over returning barrels to the market, and adaptability to proceed pausing and even reverse the changes,” Ashford added.
“The 4 nations with extra compensation cuts for previous overproduction submitted up to date schedules. Kazakhstan elevated its cuts for January, as much as 503,000 barrels per day, from a 279,000 barrel per day goal set final month,” the analyst continued.
“February cuts have additionally been elevated, to 629,000 barrels per day from 569,000 barrels per day. These changes are unsurprising, given the slew of points affecting Kazakh manufacturing and exports during the last month. Iraq has additionally made small changes to its schedule, rising its cuts by 20,000 barrels per day in January and 20,000 barrels per day in February,” Ashford went on to state.
The Commonplace Chartered Financial institution analyst highlighted within the report that the subsequent assembly is scheduled for March 1 “when the group will resolve whether or not to restart the incremental manufacturing will increase or maintain them paused”.
“An ongoing pause may recommend to the market that the group sees fundamentals as weak, regardless of the pause being blamed on typical Q1 seasonal softness,” Ashford stated.
“Members can be on the lookout for a number of key metrics to find out if the market can take these additional barrels. Whereas spot value can be entrance and middle for the media, changes within the ahead curve can be extra vital,” Ashford added.
“Over the previous month the curve has strengthened notably, with backwardation pushing out to Q1-2027. One month in the past it solely utilized to the entrance three contracts,” Ashford continued.
“If immediate costs stay regular within the low to mid $60s per barrel, market sentiment improves and the ahead curve continues to strengthen, then we see no cause for OPEC+ to proceed pausing its will increase for the April loadings,” the analyst went on to state.
The Commonplace Chartered report projected that the ICE Brent close by future crude oil value will common $62.00 per barrel within the first quarter, $63.00 per barrel within the second quarter, $64.00 per barrel within the third quarter, $64.50 per barrel within the fourth quarter, and $63.50 per barrel general in 2026.
In a report despatched to Rigzone by the Skandinaviska Enskilda Banken AB (SEB) workforce on Thursday, SEB Commodities Analyst Ole R. Hvalbye highlighted that Brent crude “peaked at $71.9 per barrel on January 29 as geopolitical danger premium surged, earlier than that premium light rapidly and costs fell to $65.2 per barrel simply three buying and selling days later”.
Hvalbye added within the report that, “since then, geopolitics has crawled again in, lifting Brent once more to round $68.4 per barrel” on Thursday morning.
“Zooming out, Brent is up roughly $7.8/bl (+~13 %) since New 12 months, with about $3.2 per barrel added simply this week alone,” he famous.
“Value motion has been quick, uneven, and headline-driven, with the Center East, and Iran particularly, as key,” he continued.
Hvalbye went on to state within the report that the Brent curve continues to inform a transparent story.
“Pronounced front-end backwardation displays near-term geopolitical worry, whereas the curve additional out stays in contango,” he stated.
“That construction alerts a market nonetheless anticipating surplus and stockbuilding except OPEC+ actively intervenes. If the market really believed the excess had disappeared, all the curve would have flattened. It has not,” he added.
To contact the writer, e mail andreas.exarheas@rigzone.com
