OPEC+ Policy: Supply Discipline Holding
OPEC+ has been remarkably united this year. The group extended deep voluntary cuts through Q3, with Saudi Arabia and Russia shouldering the bulk to defend $80+.
Compliance has been strong — better than many expected. Spare capacity remains massive (over 5–6 million bpd). Recent meetings signaled a cautious approach to unwinding cuts.
Riyadh needs $90+ to balance its budget, so there's zero appetite for flooding the market. Geopolitical risk premium helps too.
Demand Concerns: The Slowing Story
Global demand growth has disappointed. IEA and OPEC forecasts keep getting revised lower — now barely 1–1.5 million bpd for 2025.
- China's sluggish recovery: property crisis lingering, stimulus not translating
- EV adoption: fleet efficiency improving faster than expected
- Tariff fallout: slower trade volumes weighing on diesel and jet fuel
U.S. shale holding near record highs, non-OPEC supply growing steadily.
Technical Setup: Range Trading Rules
The chart screams consolidation. WTI's multi-month range has clear boundaries:
Support: $68–$70 (200-day MA, prior lows).
Resistance: $82–$85 (multiple tests, 50% Fib retracement).
For traders: fade the edges. Buy low-$70s dips with tight stops, sell mid-$80s rallies. Carry is minimal, volatility low — this is a grinder, not a trend play.
Bottom Line
Crude oil's range is the market's honest reflection: OPEC+ supply cuts counterbalanced perfectly by softening demand growth. No clear winner means no clear breakout.
$100 feels as distant as $50 right now. We're staying on the sidelines with oil exposure. Energy independence themes are real, but crude itself is too cyclical and headline-driven for our book.
In this inflationary regime, hard assets with scarcity and monetary premium — our maximum metals allocation — remain the superior play.