- Early Tuesday morning, the IEA projected global oil demand to fall by 80,000 barrels per day during 2026.
- This raises the question of a potential bearish demand market, as opposed to a bullish demand market defined by new demand on steady to growing supplies.
- Forward curves and spread tables indicate this is not the case, but rather increased volatility created by the US president's War on Iran.
One of the first market headlines that jumped out at me Tuesday morning came from CNBC and read, “Oil falls as IEA (International Energy Agency) predicts ‘demand destruction’ will spread and hopes for fresh Iran talks grow”. Since this story came out pre-dawn, we’ve seen both Brent (QAM26) and WTI (CLK26) crude oil continue to slide, a move that began during Monday’s session in what looked to be what has come to be known at the latest TACO Trade. In other words, there was a good chance the US president was going to back away from his threat of blockading the Strait of Hormuz and announce yet another ‘deal’ as the reason why. The game isn’t complicated, and the only one in town these days.
