Oil: TTF fund short grows to record high – ING

It was a choppy session for the Oil market on Wednesday, but ultimately a relatively bearish EIA inventory report ensured that Brent settled more than 1.4% lower on the day. US crude Oil inventories increased by 5.2m barrels over the last week, driven by a 873k b/d increase in crude Oil imports, ING's commodity experts Ewa Manthey and Warren Patterson note.

Outlook for the Oil market remains bearish

"However, refined product numbers were more constructive, with gasoline inventories falling by 4.73m barrels over the week, leaving US gasoline stocks at their lowest level since November 2022. Seasonally, we should start to see gasoline inventories edging higher in the weeks ahead, as refinery run rates recover following maintenance season. Meanwhile, distillate fuel Oil stocks fell by 643k barrels, leaving total distillate stocks around 8% below the seasonal five-year average."

"While the outlook for the Oil market remains bearish with expectations for a large surplus in 2026, there are clear and obvious risks in the form of potential disruptions to Russian Oil flows. Furthermore, the continued strength seen in refinery margins provides some resistance to the bearish outlook for the crude market. However, a large part of the strength seen in refinery margins is driven by supply concerns rather than due to stronger demand."

"Meanwhile, Saudi Aramco cut its official selling prices (OSPs) for all grades of crude Oil into Asia for December loadings. The Saudis cut the OSP on the flagship Arab Light into Asia by $1.20/bbl MoM to leave it at a premium of $1/bbl over the benchmark – the lowest level since January. The cut in OSPs follows OPEC+ agreeing on another supply hike of 137k b/d for December, while also deciding to pause further supply increases over the first quarter of next year, amid expectations of a growing surplus."