At Any Rate Global Commodities: Beware the Ides of September
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Sep 12, 2025 September is poised to shift the oil market's dynamics, influenced by geopolitical tensions. Crude prices could reflect year-end weaknesses as global oil inventories show modest growth. Despite some areas facing low stock levels, refining margins have skyrocketed in the third quarter. Producers are navigating altered supply scenarios while dealing with ongoing geopolitical risks, particularly from Russia. The market's intricate response to these factors promises an intriguing forecast for oil prices.
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Prices Running Above Fair Value
- Oil prices have run $3–$5 above fair value and our Q3 forecast despite a $6 handle outlook for 2025.
- Prompt spreads stayed in backwardation through 2025, showing price resilience amid rising inventories.
Five Conditions For Year-End Weakness
- Five conditions were listed in June that must materialize for crude to reflect year-end weakness around $60 Brent.
- In June we expected only OECD stock builds and crude curve flattening to materialize, limiting downside.
Hidden Non‑OECD Stock Builds
- Global oil liquids inventories rose but OECD builds were much smaller than expected, causing our OECD-focused model to underpredict visible supply.
- Large underground storage in China and the Middle East hides substantial non-OECD stock builds from satellite and OECD data.