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Insight Weekly Market Report Market Report - 07.10.2025

Market Report Week 41 - 07.10.2025

Other insights Oct. 07, 2025
Market Report Week 41 - 07.10.2025 Download the full report here

OPEC increases production – but less than feared

In this edition of Energy Market Drivers, we discuss the latest OPEC+ meeting on Sunday. We still see some downside risks for oil prices in Q4, but, as we discussed in last week's issue, we assess these as temporary. 


Any move lower could provide an attractive entry level for hedging oil and bunker exposure in 2026. We expect the average Brent price to be USD 67 in 2026, moving above USD 70 in H2 2026. 

 

Please note that due to holidays, there will be no Weekly Market Report next week. 

Bunker Port Brief

Singapore

The Asian LSFO market is seen remaining rangebound, as adequate inventories are likely to cap any sharp upswing in cash valuations. Stockpiles for the prompt month may keep intermonth spreads between a slight contango and a narrow backwardation.
The Asian HSFO market could come under pressure from elevated replenishment cargoes between end-September and mid-October. Potentially, this adds to the adequate supplies.
The Asian gasoil complex may remain firm, supported by lower stockpiles and imports, alongside fresh Russian export controls.

ARA

Lsmgo noticeably tight on the prompt so requesting extra notice where possible on this grade.

Fujairah

The FUJ/KFK market saw a slight pickup in demand this week, though activity remains measured rather than strong. The standout development is on HSFO, where availability has become extremely tight, with lead times now stretching to 10–15 days and premiums rising accordingly. VLSFO is also showing some tightening, though a few prompt slots are still available at a premium. Looking ahead, HSFO supply pressure is likely to persist into next week, keeping premiums firm, while VLSFO should remain relatively stable but with prompt barrels continuing to command a premium.

Houston

The FUJ/KFK market saw a slight pickup in demand this week, though activity remains measured rather than strong. The standout development is on HSFO, where availability has become extremely tight, with lead times now stretching to 10–15 days and premiums rising accordingly. VLSFO is also showing some tightening, though a few prompt slots are still available at a premium. Looking ahead, HSFO supply pressure is likely to persist into next week, keeping premiums firm, while VLSFO should remain relatively stable but with prompt barrels continuing to command a premium.

New York

Demand remains strong from liner segment. Spot demand not there.

Panama

Market down.

Port Louis

A quiet week continues, with minimal demand. HSFO cargoes may filter down to PL shortly.

Durban

Poor weather in Port Elizabeth has seen more inquiries than previous weeks heading to Durban, however the market still remains flat.

Walvis Bay

High swells continue meaning STS at anchorage only. Some suppliers have moved out further north up the coast to avoid delays.

For port availability and demand, download the full report here. 

Soft message from OPEC+, but still weak underlying fundamentals


On Sunday, the so-called OPEC+  announced that,

“In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, [OPEC-8] decided to implement a production adjustment of 137,000bp/d”.

Before Sunday's meeting, there had been speculation that OPEC+ might add as much as four times this amount. Saudi Arabia and the UAE reportedly argued for a larger production increase to expand their market share. At the same time, Russia pushed for a smaller rise, reflecting its limited ability to boost output amid low investment and Ukrainian strikes on oil production and export infrastructure. Russia also has a clear interest in keeping prices high to finance its ongoing war of aggression against Ukraine.

The market breathed a sigh of relief on Monday that the increase was not larger, and Brent is trading just under one dollar higher at USD 65.30. However, we assess that the underlying sentiment in the oil market remains bearish.

However, even before Sunday’s announcement, market balance forecasts indicated a sizable build in inventories over the next six months. 

Recently, the number of barrels "on water" has skyrocketed to a level not seen since the onset of the pandemic.

The oil structure has also weakened. The backwardation between the second and third Brent contracts has almost disappeared, trading at just 22 cents — its closest to contango since early May, typically a bearish signal.

We expect oil prices to trade lower in the coming weeks, and a test of USD 60 is not unlikely. 

However, as we highlighted last week, a move to USD 60-64 would represent an attractive buying opportunity.

Chart 1

We continue to see several supportive factors for oil prices:

* OPEC compensation cuts from overproducing members will limit the effective supply increase in the coming quarters.
* Additional supply capacity lies mainly with Saudi Arabia, the UAE, and, to some extent, Iraq.
* China continues to build strategic stocks, around 150 million barrels added over the past six months, and this is likely to continue.
* US production growth remains under pressure at the current price level.
* OPEC-8 will likely pause further increases once inventory builds become more visible, with “oil on water” already surging sharply.

 

Overall, we expect short-term downward pressure on oil prices here in Q4, but a recovery is anticipated in 2026. For more information, see my LinkedIn Post and the accompanying charts.

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