Global Oil Fundamentals Oil price update: pulled in different directions Trajectory remains similar, small increase to 4Q25, small cut to 2026 Oil prices held up better than expected in 3Q25, as the bearish OPEC+ unwind was partially offset by geopolitical risks, resilient demand and China's stockpiling. We continue to expect a move lower in the near-term though, as seasonally softer demand and incremental OPEC+/non-OPEC+ supply weigh further. Reflecting the higher starting point than anticipated and ongoin ...

10 October 2025 | 10:37PM EDT Commodities Research Oil Comment: Closing Trade Recommendation As Price Declines to Our December 2025 Forecast 1 Our OECD commercial oil stocks nowcast rose by 13mb on October 10th from day prior on builds in ARA oil products stocks and upward revisions in Kpler crude inventories. Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Alexandra Paulus +1(212)902-7111 | a ...

Gold prices tumbled below the $4,000-per-ounce mark on Friday, and crude prices fell as Russia escalated strikes on Ukraine’s energy grid, heightening geopolitical tensions.Russia Attacks Ukraine’s Energy InfrastructureThe pullback comes amid fresh reports of a “massive” Russian assault on Ukraine’s power infrastructure, according to CNN. Ukrainian officials described the early Friday barrage as targeting energy generation and distribution facilities, a tactic reminiscent of previous winter campaigns aimed ...

Key TakeawaysAsia-Pacific markets opened lower, following a negative handover from the US, where the S&P 500 (SPX) snapped a 7-day win streak, with AI-related concerns weighing on sentiment.Japan's Current Account Balance for August significantly surpassed expectations, reaching ¥3,775.8 billion, alongside a positive Trade Balance of ¥105.9 billion.Singapore and Australia are set to deepen cooperation in defense technology and expand their economic partnership, with discussions including the recent Optus em ...

The prices of agricultural commodities in the grain/oilseed, soft, and animal protein sectors posted losses in September, except for October lean hog futures, which gained 5.08%.COMEX copper futures, the volatile red metal, recovered in September, after wild price swings over the past months due to tariffs. The futures contract rose 5.79% in September.Gold reached a new record high of nearly $3,900 per ounce, posted its eighth consecutive record quarterly peak, and rose convincingly above its inflation-adju ...

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Market Trends - Brent crude oil, the global benchmark, is trading at a discount to its Middle Eastern counterpart [1] - A glut is forecast for later in the year [1] Geopolitical Factors - President Donald Trump is cracking down on Russian barrels [1]

Summary of Key Points from the Conference Call Industry Overview - The oil market is anticipated to experience a significant surplus in the coming quarters, which is both large and well-anticipated, suggesting a potential weakening of prices but not a disorderly sell-off [1][10] - The forecast for Brent crude oil prices remains unchanged at $60 per barrel for 1Q 2026 [1][6] Core Insights - **Supply and Demand Dynamics**: - Demand growth has stabilized at a below-trend rate of 0.75 million barrels per day (mb/d) for 2025, with a consensus forecast of approximately 0.85 mb/d [9][24] - Non-OPEC supply is expected to grow robustly, with a projected increase of 0.9 mb/d from mid-2025 to the end of the year, driven by new projects in Brazil and Guyana [9][54] - OPEC supply has increased by approximately 1 mb/d since March, primarily from Saudi Arabia and the UAE, but is expected to stabilize moving forward [9][11][66] - **Price Forecasts**: - Despite the anticipated oversupply, Brent prices are expected to remain above $60/bbl due to factors such as storage economics, potential OPEC cuts, and market expectations [14][17] - A surplus of 1.5 mb/d is projected for 4Q 2025, increasing to over 2 mb/d in 1H 2026 [81][83] Additional Important Insights - **Refinery Operations**: - Refinery crude runs are at their highest levels for several quarters, driven by strong margins despite a decline in refining capacity due to shutdowns [3][31] - Observable inventories of refined products have started to rise, indicating that refineries may be overcompensating for closures [35][37] - **Geopolitical Factors**: - Heightened geopolitical risks, including potential sanctions on Iranian oil and tariffs on Indian purchases of Russian oil, could disrupt supply [16] - **Market Sentiment**: - The current market sentiment is characterized by a paradox where oil prices are relatively cheap compared to other assets, yet demand growth remains sluggish [16][28] - **Long-term Outlook**: - The oil market is expected to face challenges in 2026, with a slowdown in non-OPEC supply growth anticipated after a strong exit rate in 2025 [55][56] This summary encapsulates the key points discussed in the conference call, highlighting the current state and future outlook of the oil market, including supply and demand dynamics, price forecasts, and geopolitical considerations.

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - The report highlights the potential for energy prices to rise again due to geopolitical risks in the Middle East, particularly if Iranian oil supply declines or if there are disruptions in the Strait of Hormuz [1][2] - It discusses the implications of soft data on the US economy, indicating that higher tariffs may lead to a slight increase in unemployment and below-potential GDP growth, with inflation rebounding to the mid-3% range [9] - The report emphasizes the outlook for the Chinese Yuan (CNY), predicting further appreciation due to the strength of China's export sector and the currency's undervaluation against the Dollar [10][12] - It notes the expected increase in defense spending in the Euro area and the UK, projecting spending to rise to 2.7% and 2.5% of GDP respectively by 2027 [14] - The potential disruption of profit pools due to AI technology is also highlighted, with past technology transitions serving as a precedent for significant market changes [14] Summary by Sections Middle East Risks - The report indicates that while the initial market reaction to the Iran-Israel ceasefire has reversed, the situation remains uncertain, with potential for energy prices to rise significantly if Iranian oil supply is disrupted [1][2] - It estimates Brent crude oil prices could peak at around $90/bbl under certain scenarios, with extreme cases exceeding $110/bbl [1][6] Soft Data Insights - Company commentary suggests a reduction in job openings and capital spending expectations, indicating a cautious outlook due to policy uncertainty [9] - The report anticipates a slight increase in unemployment and a one-time inflation rebound, with the Federal Reserve expected to implement rate cuts [9] CNY Outlook - The report lowers USD/CNY forecasts to 7.10/7.00/6.90 for the next 3, 6, and 12 months, citing the potential for CNY appreciation [10][12] European Defense Spending - The report expresses optimism regarding the European defense renaissance, with expected increases in defense spending by 2027 [14] AI Disruption - The report discusses the potential for AI to disrupt existing profit pools, drawing parallels to previous technology transitions [14]

Core Viewpoint - The volatility in ExxonMobil's stock price is attributed to investor reactions to geopolitical tensions following U.S. military actions against Iran's nuclear facilities, with initial fears leading to a decline in oil prices as the actual Iranian response was less severe than anticipated [1][2][5][6]. Group 1: Market Reactions - ExxonMobil's shares experienced fluctuations, initially rising by 2% before dropping to a 3.1% decline, ultimately closing down 2.5% [1]. - Oil prices fell significantly, with Brent Crude Oil prices decreasing by 6.8% and natural gas prices down by 4% as investors reacted to the perceived less severe Iranian response [6]. Group 2: Geopolitical Context - The conflict began with Israeli strikes on Iranian military and nuclear targets, leading to heightened oil and gas prices [3]. - Investors were concerned about potential worst-case scenarios, including the blockade of the Strait of Hormuz, through which approximately 21% of the world's oil flows [4]. Group 3: Future Outlook - The initial Iranian response was characterized as symbolic, suggesting that further escalation may not be imminent, which provided relief to the markets [5][8]. - Despite the current situation, oil and gas stocks are expected to remain volatile due to ongoing geopolitical uncertainties, and they should be considered as part of a diversified investment strategy [7][8].