The Brent oil price is currently trading at the upper end of a narrow range. Developments on the economic and geopolitical front are alternating, provoking price movements on both sides. OPEC+ is expected to decide on May 31st to maintain the accelerated phase-out path of voluntary production cuts, after having done the same in May and June. This will keep pressure on oil prices. Punishing OPEC+ members with overproduction and restoring market share (especially Saudi Arabia’s) are the reason for this. Recovery of market share will mainly come at the expense of US shale producers. Global oil inventories are growing and while this is partly triggered by the low oil price, it also seems to be a sign of slowing demand growth.
The TTF gas price has stabilised, after hitting a nine-month low early this month. Trump’s futile attempts at a peace deal in Ukraine and the maintenance in Norwegian gas infrastructure prompted the largely algorithm-driven price recovery. In the background, there is a continuation of the high European gas demand (due to relatively empty gas reserves), coupled with a tight global LNG market, which justifies a somewhat higher TTF price.