Brent Prices Hold Firm as Geopolitics and Speculation Combine
Oil prices remain elevated as geopolitical tensions and speculative positioning contribute to rising costs. ICE Brent is trading near $90/bbl, supported by conflicts in the Middle East and attacks on vessels in the Strait of Hormuz.
Renewed fighting in Lebanon and assaults on waterway ships have raised concerns over regional supply disruptions, potentially complicating a US-Iran deal. Several vessels, including those linked to Abu Dhabi National Oil Co., were targeted last week.
Speculative positioning has turned more bullish, with money managers increasing their net long position in ICE Brent by 76,026 lots to 240,748 lots as of last Tuesday. This is the largest bullish position since early June 2026, driven primarily by fresh long positions and rising gross longs.
US drilling activity continues to expand, with the oil rig count increasing for a third consecutive week to 455 active rigs, marking its highest level since May 2025. The EIA estimates US crude oil production will average 13.8mb/d in 2026, up from 13.6mb/d in 2025, before reaching 14.2mb/d in 2027.