Further escalation in the Middle East drove up oil prices. In particular, Iran’s direct involvement created upward price pressure, due to the country’s oil production and role as a regional superpower. The geopolitical turmoil overshadowed a period marked by strong negative sentiment. This was prompted by the prospect of oversupply in the oil market in the short term, particularly caused by disappointing demand growth combined with increased production. The stimulus financing measures taken by the Central Bank in China may revive demand growth in the world’s largest oil importer. At the same time, we see OPEC+ – with de facto leader Saudi Arabia in the lead – starting to lift the latest production cuts from December. With this, maintaining market share seems to be a priority again, which should come as no surprise in the context of spiking US oil production.
Finally, the gas market, where the volatile TTF benchmark is moving upwards due to geopolitical turmoil and falling temperatures. In addition, we see the active monthly contract (November delivery) rising above the annual contract (2025 delivery) for the first time this year, making gas stocks uneconomic to fill.