The Commodities Feed: Oil rebounds as geopolitical risks linger

Energy – Oil edges higher as Middle East uncertainty persists Oil prices edged higher in early trading today after falling below $90/bbl yesterday. While expectations of improving Middle Eastern supply availability and bearish US inventory data have weighed on the market, uncertainty around the US-Iran conflict continues to provide some support.

US inventory data added to the bearish tone. API figures showed crude stocks increasing by 9m barrels last week, compared with expectations of a draw of around 0.6m barrels. Inventories at Cushing rose by 182k barrels, while gasoline stocks were broadly unchanged and distillate inventories increased by 1.5m barrels. Attention now turns to official EIA data due later today.

The latest EIA outlook also points to continued growth in US supply. The agency marginally lowered its 2026 crude production forecast to 13.86m b/d, still around 200k b/d higher year-on-year, while its 2027 forecast remains at 14.3m b/d, implying growth of roughly 440k b/d. US petroleum demand is expected to remain broadly flat at 20.6m b/d this year before increasing to 20.9m b/d in 2027. The EIA also raised its gasoline and diesel price forecasts for next year, reflecting continued tightness in fuel markets.

There are also signs that Middle Eastern producers expect supply conditions to improve. ADNOC has reportedly reduced the premium for December-loading Murban crude to $4/bbl, following price reductions from Saudi Aramco. The EIA expects most Middle Eastern production outside Iran to recover to pre-conflict levels by the middle of 2027.

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