Oil Prices Expected to Stay Under $70
Despite heightened tensions in the Middle East, oil prices are likely to remain capped below $70 per barrel for the rest of the year amid ample supply and uncertainties about demand. Unless actual supply disruptions occur in and around the hotspots in the Middle East, the price of oil will be a function of supply and demand, analysts and investment banks say. Growing supply from the OPEC+ group, although not as high as the monthly headline figure of 411,000 barrels per day (bpd) suggests, is set to create an oversupply on the market going into autumn, even if summer demand holds strong. On the demand side, peak summer travel season may justify higher supply, but lingering trade and economic uncertainties may cap upside to prices. As a result, most analysts expect oil prices to hover around the current levels in the mid-$60s per barrel and average below $70 a barrel for 2025. Currently, oil’s ‘normal’ price would be in the $70s range, but the market oversupply is keeping prices in the $60s, Rob Thummel, senior portfolio manager of Tortoise Capital, told BNN Bloomberg this week. “In order for oil prices to return to what we think is the $70s, kind of normal price, you need the market to really rebalance,” Thummel said. “What that means is either oil production in other locations is going to fall, and, or effectively, demand for oil is probably going to rise more than what people expect in the second half of the year.” According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, crude oil may face headwinds in the second half of the year amid rising output and economic growth concerns. “OPEC8+ continues to ramp up production in an effort to punish overproducing quota cheaters, and to reclaim market share from higher-cost producers which may eventually have to dial down production amid lower price expectations,” Hansen said in a weekly commodities commentary. Major investment banks, including Goldman Sachs, Morgan Stanley, and JPMorgan, expect Brent crude prices to average $66.32 a barrel and WTI Crude to average $63.03 per barrel this year, according to a June survey by The Wall Street Journal. The responses in June were slightly higher compared to those in the May poll, but the analysts continue to see fundamentals as key for prices, and right now these fundamentals point to an oversupply amid uncertain economic prospects with the U.S. tariff policies. The Reuters survey of 40 analysts and economists in June also saw a slight increase in the price forecasts. Brent is seen averaging $67.86 per barrel in 2025, up from $66.98 a barrel expected in May. WTI is expected to average $64.51, up from $63.35 per barrel in May. However, analysts concur that the glut would cap rallies unless the Middle East conflict broadens and leads to more volatility and price spikes. In case an oversupply overwhelms the market if summer demand disappoints, OPEC+ is likely to act swiftly to put a floor under prices by pausing production increases. “We expect OPEC+ to exert caution in raising production, even putting plans on hold indefinitely at the first signs that prices may fall significantly,” Matthew Sherwood, lead commodities analyst at EIU, told Reuters. Next week could remove some uncertainty over the global economy and oil demand as July 9 is the end of President Trump’s 90-day pause on the so-called “reciprocal” tariffs. “We could see tariff increases reinstated on some US trading partners if trade deals are not concluded. This leaves a fair amount of uncertainty going into next week,” ING strategists Warren Patterson and Ewa Manthey wrote in a note on Thursday. The oil market is full of uncertainties, but current supply and demand balances point to an oversupply and subdued oil prices in the coming months, barring a supply disruption in the Middle East.
OPEC+ Speeds Up Oil Output Hikes, Adds 548,000 Bpd In August
OPEC+ agreed on Saturday to raise production by 548,000 barrels per day in August, further accelerating output increases at its first meeting since oil prices jumped – and then retreated – following Israeli and US attacks on Iran. The group, which pumps about half of the world’s oil, has been curtailing production since 2022 to support the market. But it has reversed course this year to regain market share and as US President Donald Trump demanded the group pump more to help keep gasoline prices lower. The production boost will come from eight members of the group – Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan and Algeria. The eight started to unwind their most recent layer of cuts of 2.2 million bpd in April. The August increase represents a jump from monthly increases of 411,000 bpd OPEC+ had approved for May, June and July, and 138,000 bpd in April. OPEC+ cited a steady global economic outlook and healthy market fundamentals, including low oil inventories, as reasons for releasing more oil. The acceleration came after some OPEC+ members, such as Kazakhstan and Iraq, produced above their targets, angering other members that were sticking to cuts, sources have said. Kazakh output returned to growth last month and matched an all-time high. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, wants to expand market share amid growing supplies from rival producers like the United States, sources have said. With the August increase, OPEC+ will have released 1.918 million bpd since April, which leaves just 280,000 bpd to be released from the 2.2 million bpd cut. On top of that, OPEC+ allowed the UAE to increase output by 300,000 bpd.
IOC draws up green hydrogen fuel retail network plan
Indian Oil Corp. (IOC), the country’s largest oil-marketing company with over 37,500 petrol stations, is working on a new business plan to set up green hydrogen fuel dispensing pumps across the nation, chairman Arvinder Singh Sahney said in an interview. Sahney said that apart from captive consumption at its refineries, where Indian Oil would look at replacing grey hydrogen with green hydrogen, the company aims to eventually cater to the mobility demand in the country, thereby retailing green hydrogen fuel cells.
Oil Prices Dip on Confirmation of Inventory Build
Crude oil prices opened weaker today following Wednesday’s release of U.S. oil inventory data that confirmed API’s estimate of a build. Regardless of the fact that the build, at 3.8 million barrels as estimated by the EIA, followed several weeks of draws, it pushed prices lower in the last trading day before the July 4th weekend. At the time of writing, Brent crude was trading at $68.62 per barrel and West Texas Intermediate was changing hands for $67.01 per barrel, both down from Wednesday’s close. The trend could be reversed before too long, however, after the Dallas Fed confirmed the expected slowdown in drilling activity in the shale patch. In its latest quarterly report, the Fed said industry executives pointed to declines in both oil and gas production during the second quarter of the year, with the oil production index falling to -8.9 and the natural gas production index to -4.5, which represents a sharp reversal from moderate growth earlier this year. The Dallas Fed also cited executives as saying they expected a lot less drilling going forward. Among the larger producers, with output of 10,000 bpd or more, 42% said they expected a significant decline in drilling activity, with many citing the Trump administration’s trade policies as a deterrent, and more specifically, the tariff push. “It’s hard to imagine how much worse policies and D.C. rhetoric could have been for US E&P companies,” one respondent to the survey said. “We were promised by the administration a better environment for producers, but were delivered a world that has benefited OPEC to the detriment of our domestic industry.” Meanwhile, a trade deal between the United States and Vietnam infused markets with a sense of certainty, according to Reuters, that could result in stronger oil demand, stimulating bullish sentiment among traders. The deal will see 20% tariffs imposed on Vietnamese exports to the U.S.
Standard Chartered: Oil Markets Can Easily Absorb Extra OPEC+ Barrels
Oil markets kicked off the new year in a downbeat mood, with Wall Street analysts almost unanimously predicting a huge oversupply in 2025 even if OPEC+ did not add a single barrel back into the market. Well, it’s six months on, and oil markets have continued to defy these bearish expectations. The eight OPEC+ countries that made additional voluntary cuts in 2023 are set to meet on July 6, with expectations that the ministers will continue the unwinding of the November 2023 tranche of cuts, increasing targets by 411 thousand barrels per day (kb/d) for the fourth successive month. Commodity analysts at Standard Chartered have also predicted a final 411kb/d increase will be announced at the August meeting, resulting in the full unwinding of the voluntary cuts that totalled about 2.2 million barrels per day (mb/d). Thankfully, the rapid unwinding of the cuts has proved to be a highly successful strategy, with oil markets having little trouble absorbing the extra barrels. Inventories remain very low, while the prompt market remains backwardated and with the previous market fears of historic surplus giving way to a general acceptance that fundamentals entered the year stronger than most traders believed with demand remaining robust. The latest EIA weekly data was bullish, with crude oil inventories falling 5.84 mb w/w to 415.11 mb, taking them 45.59 mb lower y/y and 51.39 mb below the five-year average. Indeed, crude inventories are currently just 5.16 mb above their five-year low, having declined by 28.05 mb (801kb/d) over the past five weeks alone while the deficit to the five-year has widened to the largest since June 2022. Distillates remain the tightest oil product group: distillate inventories fell counter-seasonally by 4.07 mb w/w to 105.33 mb, increasing the deficit below the five-year average by 4.44 mb to -26.3 mb. Implied gasoline demand rose 389 kb/d w/w to 9.68 mb/d, the highest weekly reading since Christmas 2021. The 30 June release of the EIA’s Petroleum Supply Monthly revised April gasoline demand higher by 30 kb/d to 8.91 mb/d, taking the y/y increase from 0.8% to 1.1%. Total April oil demand was revised 488 kb/d higher to 20.213 mb/d, good for a y/y increase of 0.6%. StanChart has predicted that oil markets will continue to absorb extra OPEC+ production easily in the short term, and has even forecast a global stock draw of 0.9 mb/d in the third quarter following a 0.2 mb/d build in the June quarter. According to the analysts, the tightening in Q3 will primarily be the result of a 1.4 mb/d q/q increase in demand while non-OPEC+ output is expected to remain fairly flat. However, StanChart has warned that the lack of compliance to set quotas by the likes of Kazakhstan could become a more significant issue when the seasonal demand strength starts abating in the fourth quarter of the current year or the first quarter of 2026. Still, the experts say OPEC+ may not need to curtail production in Q1 2026, with the projected stockbuild not likely to be any larger than normal while inventories will be starting from very low levels. However, the first line of cuts is likely to come from the overproducers if the situation does indeed warrant some production cuts. Meanwhile, EU natural gas inventories have continued to rise at a rapid clip, with the y/y deficit narrowing on 32 of the past 34 days while the deficit below the five-year average has narrowed on 25 of the past 32 days. According to Gas Infrastructure Europe (GIE) data, EU inventories clocked in at 67.98 billion cubic meters (bcm) on 29 June, 21.58 bcm lower y/y and 10.37 bcm below the five-year average. The w/w build was 2.70 bcm, 16.5% higher than the five-year average. The EU inventory builds are being driven by higher LNG flows. According to StanChart data based on European Network of Transmission System Operators for Gas (ENTSOG) daily data, LNG flows into the EU averaged 429 million cubic metres per day (mcm/d) over the past five months, considerably higher than 342 mcm/d average for last year’s corresponding period. EU gas demand remains subdued at 796 mcm/d, good for a y/y decline of 2.8%. European gas prices remain exposed to significant downside risk, with a potential path below EUR 30 per megawatt hour (MWh) thanks to weak demand, stronger-than-usual inventory builds, poor market technicals and reduced concerns about LNG supply disruptions due to the Middle East conflict.
Diesel days numbered? India eyes massive LNG truck expansion by 2040
India’s liquefied natural gas (LNG) truck population is projected to grow from around 700 trucks in FY24 to nearly 2,00,000 by 2040 under the Petroleum and Natural Gas Regulatory Board’s (PNGRB) Good-to-Go (GtG) scenario and to 5,00,000 in a high-growth Good-to-Best (GtB) scenario. In contrast, China has already crossed 8,00,000 LNG trucks with a network of 6,000 refuelling stations. According to the demand assessment study conducted by PNGRB, India is aiming to transition one-third of its long-haul trucking fleet to LNG over the next 15 years to reduce diesel consumption and lower carbon emissions in the freight sector. The current penetration of LNG in the trucking segment remains limited, with only 20 stations and 700 trucks operating as of FY24. The report notes that diesel-powered road freight accounts for nearly 65–70 per cent of India’s logistics share and contributes 35–40 per cent of road transport emissions. Based on stakeholder consultations and infrastructure outlook, LNG truck numbers may rise to 30,000 by 2030 in the GtG scenario and 50,000 in the GtB case. By 2040, this may rise further to 2,00,000 and 5,00,000, respectively,” the report said. The study estimates daily LNG consumption per truck at 131.4 scmd, assuming 320 km travel per day with average mileage of 3.2 km/kg. In contrast, China’s LNG trucking ecosystem is significantly larger, with over 8,00,000 trucks already deployed and around 6,000 LNG stations in operation. The PNGRB report highlights that China achieved this scale by creating a supportive ecosystem involving pricing support, dedicated manufacturing lines, and extensive fuelling infrastructure. Europe has about 80,000 LNG trucks and 525 stations, while the US fleet comprises 35,000 LNG trucks with 250 stations. India’s LNG push has started with the government’s mandate to open 50 LNG stations in the initial phase. Industry feedback suggests that expansion to 1,000 stations will be required to support wider adoption. The report also notes stakeholder suggestions for incentivising domestic LNG manufacturing, tax exemptions, waiver of road tolls for LNG vehicles, and allocation of domestic gas to stabilise fuel prices.
Pakistan looking to sell excess LNG amid supply glut curbing local gas output – document
Pakistan is exploring ways to sell excess liquefied natural gas (LNG) cargoes amid a gas supply glut that could cost domestic producers $378 million in annual losses, according to a presentation and a government official familiar with the matter. The country has at least three LNG cargoes in excess that it imported from top supplier Qatar and has no immediate use for, and is currently selling natural gas at steep discounts to local users, a second government official said. Power generation from gas-fired power plants, which has historically accounted for a lion’s share of LNG use in the country, has declined for three straight years ended 2024, with cheaper solar power use dramatically gaining at the expense of gas-fired generation, data from energy think-tank Ember showed. That has forced domestic producers of the fuel to curb production. Pakistan is currently exploring the possibility of transferring LNG cargoes to rented tankers for “offshore storage and onward sale,” state-owned oil and gas producer OGDCL said in a presentation to industry and government. “Excess LNG in the gas network has resulted in significant production operations impact for local exploration and production companies over last 18 months,” OGDCL said, adding that it had forced curtailment of domestic supply. The domestic industry could suffer $378 million in losses over the next 12 months at the current rate of curtailment, according to the presentation dated May 29 reviewed by Reuters. It is not immediately clear if Pakistan’s long-term LNG import contracts with Qatar Energy allows for a resale of cargoes. One of the government officials said the country was still exploring ways to do it. Qatar typically has a destination clause in long-term supply contracts with buyers that restrict where the cargoes can be sold. Qatar Energy did not immediately respond to a request seeking comment. Pakistan has already deferred five contracted LNG cargoes from Qatar without financial penalty, shifting delivery from 2025 to 2026, as the country grapples with surplus capacity. Pakistan’s petroleum minister Ali Pervaiz Malik declined to comment on the presentation, but said renegotiating contracts with Qatar was a “complex” process that could take at least a year, and a final decision on initiating it had yet to be made. “While the existing contract with Qatar allows Pakistan to decline vessels, doing so incurs penalties and other complications,” Malik told Reuters. The glut has stemmed from several gas-fired power plants, previously operating under must-run contracts, now being sidelined, Malik said. “It was expected that summer season will create extraordinary demand but the trend indicates the opposite,” OGDCL said in the presentation.
India to lead global oil demand: S&P Global
Even as long-term global oil demand is projected to decline due to alternative energy adoption and efficiency gains, India is expected to lead the global oil demand growth, as per S&P Global Commodity Insights. The growth in demand will, however, increase the country’s import dependency, reinforcing the need for a diversified crude sourcing strategy amid inadequate domestic supplies. US President Donald Trump’s sweeping tariffs on all trading partners have introduced significant economic uncertainty, potentially reducing global GDP growth from 2.8% in 2024 to 2.2% in 2025, the agency said. This, S&P forecasts, could cut oil demand growth from 1.2 million barrels per day to 0.8 million b/d in 2025, with the possibility of zero or negative growth in the second half of the year. “Demand from China and the US, is expected to be most affected, particularly for refined products like diesel and jet fuel. Meanwhile, the Organisation of Petroleum Exporting Countries (OPEC) raised output by 411,000 b/d for May–July 2025, triggering a 20% drop in Brent prices,” said Premasish Das, Executive Director for Oil Markets Research and Analysis, S&P Global Commodity Insights. “The increase, driven by frustration among compliant producers, may be offset if overproducers like Iraq, Russia, and Kazakhstan reduce their output,” he added. S&P now forecasts an average Brent price of $68/barrel for 2025, up from $63/barrel earlier, but expects a decline below $60/bbl by year-end due to strong supply growth. Geopolitics is now central to trade forecasts and corporate strategy, noted Rahul Kapoor, Vice President and Global Head of Shipping Research, S&P Global Commodity Insights.
Petrol sales rise 6.4% in June; diesel up 1.2%
Petrol sales increased 6.4% year-on-year in June, while diesel sales went up 1.2%, according to provisional data provided by the petroleum and natural gas ministry. Aviation turbine fuel (ATF) sales increased 3.6% year-on-year in June. The consumption of liquefied petroleum gas (LPG), used primarily for cooking, surged 10.2%. For the April-June quarter, petrol sales registered 6.9% growth, while diesel sales went up 2.5%. Jet fuel consumption increased 3.9%, and cooking gas saw a 10.1% surge during the quarter. Summer holidays supported petrol sales, while diesel demand appears to have been affected by the early onset of monsoon. ATF sales have slowed this financial year after increasing nearly 9% in 2024-25. Diesel accounts for nearly 40% of the total refined products consumed in the country. The fuel’s sales are influenced by economic activity, rainfall and the adoption of alternative energy sources.
Crude oil prices back at $67/barrel, likely to remain stable: Minister Puri
Union Petroleum and Natural Gas Minister Hardeep Singh Puri on Tuesday said crude oil prices are back at USD 67 per barrel and are likely to remain around that level. Speaking at the 77th Foundation Day of the Institute of Chartered Accountants of India (ICAI), Puri also said India increased biofuel blending and is sourcing crude oil from 40 countries as against 27 earlier. He said when the tensions were at their peak in the Gulf region recently, many tried to be alarmist about the crude oil prices moving northwards. “I said nothing will happen. Oil prices sahi rahenge (will remain stable). Don’t worry. And the price of oil is back to USD 67 a barrel. Why do I say that? …there is enough oil available in the world,” the minister said. Moreover, Puri added India has diversified its crude oil sourcing. “We used to buy oil from 27 countries, we are buying it from 40 countries,” he said. The minister also spoke in detail about the achievements made by the country in bio-fuel blending, and meeting targets ahead of schedule. “We are the second-highest biofuel blending nation in the world. And today, when I look at it, any day you could raise it from 20 per cent to 25 per cent and 30 per cent. You have to just do your consultation and take what is along,” he said. Puri further said green hydrogen is the fuel of the future. In his address, the minister also listed the achievements of the Modi government during the past 11 years. He said the ministry’s flagship Pradhan Mantri Ujjwala Yojana, has delivered over 16.5 crore LPG connections since 2014, empowering women, reducing indoor air pollution, and promoting public health. The growing market capitalisation of Oil & Gas PSUs-nearly doubling to Rs 8.79 lakh crore since 2014-reflects the sector’s robust performance and the trust of investors, he said. He further said that in the past 11 years, India has risen from the eleventh to the fourth largest economy in the world. He said India’s GDP has more than doubled-from USD 2.1 trillion in 2014 to USD 4.3 trillion in 2025. “We have recently overtaken Japan and are poised to become the third-largest economy by 2030, overtaking Germany,” the minister said while highlighting the country’s resilience during global headwinds and the critical role played by bold policy reforms, extensive social welfare schemes, and sound financial management. The Minister called on chartered accountants to embrace artificial intelligence and advanced analytics, automating routine tasks to focus on strategic advisory roles and harnessing data-driven insights for more effective decision-making. “Embracing AI is no longer optional-it is essential for staying competitive and innovative in today’s evolving financial world,” he said. Puri urged the ICAI community to uphold transparency, efficiency, and accountability as India marches towards a developed nation by 2047. Speaking at the occasion, ICAI President Charanjot Singh Nanda said that from 1700 members to over 4 lakh members spanning across 47 countries, the Institute of Chartered Accountants of India has grown a long way in the last 77 years. “As a trusted partner in nation building ICAI has always supported the Government initiatives contributing to India’s journey towards becoming a Viksit Bharat. Our profession is evolving rapidly, with AI, blockchain, and big data, the tools may change, but our values must remain constant,” Nanda said.