Outrageous Predictions
Executive Summary: Outrageous Predictions 2026
Saxo Group
Read Saxo's Outrageous Predictions for 2026, our latest batch of low probability, but high impact ev...
You can access both of our platforms from a single Saxo account.
Crude oil rangebound with focus on inventories
Ole Hansen
Head of Commodity Strategy
The alternating focus between supply and demand, both of which are currently challenged, have led to crude oil’s rangebound trading behaviour since April. The short-term outlook points to support with rising crude oil production from several Opec members and Russia unlikely to be enough to meet the shortfall from Venezuela and particularly Iran as US sanctions begin to bite.
The recent run-up from support at the 200-day moving average in both WTI and Brent crude ran out of steam earlier this week. This after the break above $78.50/barrel on Brent crude oil resulted in another failed attack and subsequent retracement from the technical and psychological important area around $80/b.
Production surveys from both Bloomberg and Platts this week showed how Opec so far had been able to offset a beginning slowdown in production from Iran. With most of the increased being contributed by one-off increases, especially from Libya, the outlook still points to a period where Opec’s total production is likely to drop as the Iranian slowdown accelerates.
Rising oil prices due to the short-term impact of US sanctions may, however, create a medium-term challenge for demand growth. This as emerging markets, the main source of demand growth, suffer from a perfect storm of rising oil prices and weaker currencies.
We maintain the view that crude oil is likely to remain rangebound and that a potential spike above $80/b could turn out to be short-lived. While Brent crude trades well below the $110/b average seen between 2011 and 2014, some key oil-consuming nations are seeing prices in their local currencies at or even above that level.
Following three weeks of net selling, funds turned aggressive buyers of crude oil (Brent in particular) in the week to August 28. In total, funds bought 126,000 lots of oil and products with the 65,000 increase in Brent being the biggest weekly jump since December 2016 when the Opec+ group announced its plan to curb production. The buying is likely to have continued up until Monday before Tuesday’s failed attempt at $80/b helped trigger profit-taking.
Bloomberg’s intelligence unit in a recent update highlighted the risk to demand growth from a slowdown in demand from China’s strategic petroleum reserves (SPR) purchase programme. In it, they wrote: “China's SPR purchases have accounted for about a third of annual global oil demand growth since 2016. They could fall by as much as 85-90% as reserves approach sufficient energy security levels, barring a Chinese reassessment of its needs amid an escalating trade war”.
A slowdown of this magnitude would go a long way to offset the potential drop in supply from Iran. Such a development, together with the already heightened risks to overall demand going into 2019, could force a rethink of the medium-term price outlook and help send the price back down to $70/b and potentially even beyond.
While this is currently only speculation, the one thing that remains a fact is that Iran will suffer a further slowdown in production and exports over the coming months. Until hard data or monthly surveys from Opec and IEA begin to show demand softness, the upside risk will still be viewed as the direction of least resistance.
Later today at 15:00 CET (one day and half an hour later than usual) the Energy Information Administration will release its Weekly Petroleum Status Report. Crude oil has ticked a bit higher today ahead of the report on a combination of a softer dollar and surveys pointing to a third weekly drop in nationwide crude stocks.
A slowdown of this magnitude would go a long way to offset the potential drop in supply from Iran. Such a development, together with the already heightened risks to overall demand going into 2019, could force a rethink of the medium-term price outlook and help send the price back down to $70/b and potentially even beyond.
While this is currently only speculation, the one thing that remains a fact is that Iran will suffer a further slowdown in production and exports over the coming months. Until hard data or monthly surveys from Opec and IEA begin to show demand softness, the upside risk will still be viewed as the direction of least resistance.
Later today at 15:00 CET (one day and half an hour later than usual) the Energy Information Administration will release its Weekly Petroleum Status Report. Crude oil has ticked a bit higher today ahead of the report on a combination of a softer dollar and surveys pointing to a third weekly drop in nationwide crude stocks.
Latest Market Insights
Outrageous Predictions 2026
-
-
Outrageous Predictions
A Fortune 500 company names an AI model as CEO
Charu Chanana
Chief Investment Strategist
Can AI be trusted to take over in the boardroom? With the right algorithms and balanced human oversi... -
Outrageous Predictions
Despite concerns, U.S. 2026 mid-term elections proceed smoothly
John J. Hardy
Global Head of Macro Strategy
In spite of outstanding threats to the American democratic process, the US midterms come and go cord... -
Outrageous Predictions
Dollar dominance challenged by Beijing’s golden yuan
Charu Chanana
Chief Investment Strategist
Beijing does an end-run around the US dollar, setting up a framework for settling trade in a neutral... -
Outrageous Predictions
Obesity drugs for everyone – even for pets
Jacob Falkencrone
Global Head of Investment Strategy
The availability of GLP-1 drugs in pill form makes them ubiquitous, shrinking waistlines, even for p... -
Outrageous Predictions
Dumb AI triggers trillion-dollar clean-up
Jacob Falkencrone
Global Head of Investment Strategy
Agentic AI systems are deployed across all sectors, and after a solid start, mistakes trigger a tril... -
Outrageous Predictions
Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance
Neil Wilson
Investor Content Strategist
A quantum computer cracks today’s digital security, bringing enough chaos with it that Bitcoin crash... -
Outrageous Predictions
Taylor Swift-Kelce wedding spikes global growth
John J. Hardy
Global Head of Macro Strategy
Next year’s most anticipated wedding inspires Gen Z to drop the doomscrolling and dial up the real w... -
Outrageous Predictions
SpaceX announces an IPO, supercharging extraterrestrial markets
John J. Hardy
Global Head of Macro Strategy
Financial markets go into orbit, to the moon and beyond as SpaceX expands rocket launches by orders-... -
Outrageous Predictions
China unleashes CNY 50 trillion stimulus to reflate its economy
Charu Chanana
Chief Investment Strategist
Having created history’s most epic debt bubble, China boldly bets that fiscal stimulus to the tune o...