The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that international oil prices fluctuated strongly in July. Looking ahead to the future market, the geography was repeated. The opening process of the strait had ups and downs. It is easy to rise and fall while the Q3 depot is maintained, but there is limited space above. Oil prices have declined compared to the previous period, there is limited room for a rebound, recommended costs and demand-side pressure have been relieved, leading polyester industry leaders and refining leaders whose sentiment is expected to improve.
Cathay Pacific Haitong's main views are as follows:
Opinions on oil prices
The geography is repetitive, and the opening up of the straits has had its ups and downs. It is easy to rise and fall when the Q3 depot is maintained, but space above is limited. The rebound was driven by: (1) repeated geographical situations, repeated delays in the opening of the straits, and low crude oil inventories in many parts of the world over time; (2) shipping in the Strait of Mander was also affected; (3) there may be changes in early buffer measures, including the release of IEA stocks nearing an end, the resumption of Russian sanctions, and an increase in China's crude oil imports. The upper restrictions are due to: (1) the peak demand season for refined oil products is over; (2) as the midterm elections approach, the probability of geopolitical intensification is low.
Supply side: Q3 and Q4 supply forecasts lowered
Total global crude oil supply in 2026 was 102.0 and 100.8 million b/d, respectively, -4.3 and -5.3 million b/d year over year, compared with the previous month's forecast adjustments of -0.6 and -1.07 million b/d. The IEA and EIA forecast global crude oil supply for 2027 at 110.3 and 109.74 million b/d, respectively, compared with +8.3 and +8.92 million b/d compared to the same period. According to IEA and EIA forecasts, the total global crude oil supply for 2026Q3-Q4 was 101.3, 106.6, 99.7, and 103.7 million b/d, respectively. Compared with the previous month's adjustments of -1.7, -0.9, -1.6, and -3.5 million b/d, respectively. Affected by geographical conflicts, both EIA and IEA lowered their Q3 supply forecasts, and Q4 supply was lowered simultaneously.
Demand side: The three major institutions anticipate differences in demand forecasts. The IEA and EIA expect demand to decline in 2026, and OPEC is expected to maintain growth
According to IEA, EIA, and OPEC forecasts, total global crude oil demand in 2026 was 103.3, 102.73, and 105.7 million b/d, respectively, and -1.13, -1.23, and +0.62 million b/d, respectively. Compared with the previous month's forecast adjustments of -0.18, -0.04, and -0.2 million b/d, respectively. According to IEA, EIA, and OPEC forecasts, the average global crude oil demand for 2026Q1-Q4 was 104.4, 100.91, 104.27, and 106.13 million b/d, respectively. Compared with the previous month's adjustments of 0.06, -0.14, -0.34, and -0.14 million b/d, respectively. Affected by high prices, demand was disrupted in Q2, and the negative feedback effect was delayed and gradually reduced.
Inventory side: Expected to maintain an increase in inventory removal in 2026, and the IEA and EIA will adjust the balance between Q3 and Q4 tighter
The IEA and EIA expect global crude oil supply to be tight overall in 2026. The annual supply and demand balance is -1.3 and -1.9 million b/d. The balance between supply and demand will be adjusted by -0.40 and -1.02 million b/d, respectively, and the storage margin will increase. The 26Q3-26Q4 global crude oil market supply and demand balance is expected to be -1.8, +0.2 million b/d, and -3.84 and -0.63 million b/d, respectively. The IEA and IEA will tighten the Q3-Q4 supply-demand balance.
Risk warning: large fluctuations in crude oil prices; changes in OPEC+ production policies; excessive production growth in non-OPEC+ oil producers; global economic growth is slowing down, crude oil demand is declining; changes in the geographical situation, etc.