Oil: Strait risk and cautious positioning – ING

ING analysts Ewa Manthey and Warren Patterson note that Oil prices remain supported by uncertainty around the Strait of Hormuz as US-Iran negotiations continue. They highlight reduced net long positions in NYMEX WTI and ICE Brent, even as US oil activity recovers and US crude exports stay elevated. Gas prices at Henry Hub also gain support from warmer weather and higher LNG feedgas flows.

Strait risk supports Oil complex

"Oil prices remain supported by uncertainty surrounding the Strait of Hormuz. While US President Donald Trump said Washington is "semi-negotiating" with Iran, suggesting a focus on economic pressure rather than military escalation, significant hurdles remain before any broader agreement is reached. Reports indicate that Iran and Oman are nearing an agreement on a shipping route through Hormuz, though a full reopening of the waterway is still likely to depend on progress in US-Iran talks."

"Speculative sentiment turned more cautious last week. Money managers cut net long positions in NYMEX WTI by 7,257 lots to 101,050 lots, while net longs in ICE Brent fell by 20,361 lots to 164,722 lots, marking a second consecutive weekly decline."

"US oil activity has continued to recover, with Baker Hughes data showing that the oil rig count rose by three to 454, the highest level since May 2025. Meanwhile, US crude exports remain elevated as buyers seek alternative supply sources, although much of the recent increase has been supported by inventory drawdowns rather than stronger production growth."

"In gas markets, Henry Hub extended gains for a second session, supported by forecasts for warmer weather, stronger power-sector demand and higher LNG feedgas flows. Additional support came from reports that new processing capacity at the Corpus Christi LNG terminal could boost feedgas demand by around 0.8bcf/d."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)