Why does ING believe the market is overly optimistic about global oil prices?

ING believes the market is overly optimistic because it assumes Persian Gulf oil flows will quickly normalize and oil prices will continue falling, while in reality the market has oversold to a 'strongly bearish' level based on fundamentals—buyers are delaying purchases and refineries are drawing down existing inventories instead of buying new crude, expecting further price declines.

What does the steep contango (or rather, deep backwardation) in Brent crude futures indicate, and what risk does it pose according to ING?

The deep backwardation in Brent crude futures—where the spot price is far below forward contract prices—signals that buyers are incentivized to store oil rather than consume it immediately, and refineries are depleting stocks amid expectations of lower prices; ING warns this inventory drawdown is unsustainable, and once restocking demand surges, the futures curve will likely flatten abruptly.

ING: Market Overly Optimistic on Global Oil Prices

Jul 1, 2026

ING analysts caution against excessive optimism on falling oil prices as Brent trades near $70. They forecast a recovery to $85 per barrel by Q4 2026, driven by unsustainable inventory drawdowns and potential demand release.

ccin

2026-07-01

ING: Market Overly Optimistic on Global Oil Prices

ING: Market Overly Optimistic on Global Oil Prices

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