Crude reality: Back on the bear wagon — Brent target cut to $60
|After being sidelined last week with “Sell America Inc.” chaos dominating my screens, it’s time to drag oil back into the spotlight. I’ve been riding the bear bus on crude for what feels like forever — and after cutting my longstanding short at first touch of $65 Brent, I’m strapping back in. Why? Because the energy tape is starting to stink again, and the fundamentals are getting uglier by the day.
Let’s be honest — Trump’s tariff backpedal was supposed to be a shot in the arm for global demand. Instead, oil barely flinched. That’s your tell. The market’s not just looking at tariffs anymore — it’s pricing in deeper structural rot. Demand forecasts are getting slashed, and the EIA just trimmed 2025 global oil consumption by 400 kb/d. They’re still clinging to a +900 kb/d call for this year, but I’d cut that in half. Even that may be too generous if we keep tiptoeing toward a recession. Let’s call it what it is: growth premium is getting torched, and crude isn’t immune.
Meanwhile, OPEC+ just threw the market a curveball by speeding up the unwind of those “voluntary” cuts — adding 411 kb/d to the tape in May alone. Spare me the storyline about overproducers being reined in. This smells like geopolitical pressure, plain and simple. Trump wants cheap oil, and OPEC is obliging. The cartel is bleeding credibility, and supply discipline is unraveling just when the market needs it most.
Yes, there are upside risks. The U.S. is squeezing Iran harder — hoping to cut their crude exports to 100 kb/d. Ambitious? Definitely. But even marginal success tightens the screw. Russia’s still flooding the market, but secondary sanctions are creeping in, and that could eventually bite. Add to that a slow-burn risk of U.S. shale rolling over at these levels, with more and more rigs sitting below breakeven, and you've got a recipe for future supply stress… just not yet.
Bottom line: This market isn’t pricing in panic, but it’s not showing any signs of life either. The floor keeps sinking — and I’m adjusting with it. I’m cutting my 2025 Brent forecast to $60 from $65. Too many barrels. Too little demand. And way too much political noise.
Crude’s still a knife — and for now, I’d rather be holding the handle than catching the blade.
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