Market Correction in Motion

Crude Oil Eases on Supply Signals While Natural Gas Holds Steady Amid Balanced Demand

Oil prices have entered a phase of mild correction this week, as markets digest signals from both supply-side and macroeconomic developments. Brent crude is currently trading around $84 per barrel, down from recent highs, while WTI sits near $79.

The key driver behind the softening is the indication from OPEC+ that additional supply may be introduced into the market in the coming months. This is part of a strategic move to maintain balance in light of softer-than-expected demand from major economies such as China and Europe.

Moreover, investor sentiment has cooled, with net speculative long positions decreasing. The recent withdrawal of capital from oil-focused exchange-traded funds (ETFs) suggests that short-term traders are adopting a wait-and-see approach amid growing economic uncertainty.

However, this bearish pressure is being tempered by persistent geopolitical risk. Tensions in the Middle East—particularly in the Strait of Hormuz—continue to act as a price floor. Any escalation could rapidly reintroduce supply fears, reminding the market of oil’s sensitivity to regional instability.

From a macroeconomic perspective, interest rate speculation is also influencing oil futures. The U.S. Federal Reserve’s stance on maintaining higher rates for longer could suppress industrial activity, thereby dampening energy consumption in the short term.


Key Takeaway for Clients:
While prices are momentarily easing, underlying fundamentals—especially OPEC strategy and geopolitical tensions—suggest that the market remains vulnerable to sharp moves. Buyers should remain cautious but alert to opportunities created by short-term dips.




Natural gas markets are demonstrating relative calm, with Henry Hub prices hovering around $3.15 per MMBtu. After a volatile winter season driven by weather anomalies and storage concerns, the market is now adjusting to more predictable spring conditions.

In the U.S., production has remained strong thanks to resilient shale operations, particularly in the Permian and Appalachia basins. Storage levels are now within seasonal norms, easing pressure on prices.

In Europe, the picture is one of quiet confidence. Inventories remain well stocked, and LNG deliveries from the U.S. and Qatar continue at a healthy pace. Mild temperatures across the continent have also led to reduced heating demand, further stabilising prices.

Asian markets, led by Japan and South Korea, are still actively purchasing LNG, but at lower volumes compared to the winter peak. China’s return to growth is a bullish long-term factor, but current demand is described as steady rather than surging.


Key Takeaway for Clients:
For buyers, this period of price stability in gas markets offers a window for forward contracting or re-evaluating procurement strategies ahead of the summer cooling season and Q4 hedging cycles.

Oil Markets in Early 2026

February 2, 2026
Supply Chain Shifts, OPEC+ Moves, and the UAE’s Energy Strategy Published in Abu Dhabi, 02 Feb 2026 11:59 am (GST) At the start of February 2026, the global oil market stands at a crossroads. Crude prices are caught between two opposing forces. On one side, a growing supply surplus is exerting downward pressure. On the other, geopolitical tensions continue to inject volatility into pricing. Brent crude has recently approached the $70 per barrel level amid renewed U.S.–Iran friction, even as consensus forecasts point to average pricing in the low $60s for the year ahead. This complex environment is being shaped by three converging dynamics: structural shifts in global supply chains, recalibrated strategy within OPEC+, and long-term energy transition planning led by major producers such as the UAE. Global Oil Supply Chain Shifts T he global oil supply chain has been materially reshaped by geopolitics, sanctions, and changing demand centres. Following Russia’s invasion of Ukraine, crude trade flows were rapidly reoriented. By 2024, approximately 81 percent of Russian crude exports were flowing into Asia, primarily China and India, compared with around 40 percent in 2021. Europe’s share fell to roughly 12 percent, down from nearly half prior to the conflict. European refiners responded by diversifying supply, increasing imports from the Middle East, Africa, and the Americas. This diversification improved resilience but raised transport costs and extended supply routes. Key global shifts include: China , now the world’s largest crude importer, imported approximately 11.1 million barrels per day in 2024. Russia has become its largest single supplier, supported by discounted pricing and long-term bilateral trade arrangements. India dramatically expanded imports of Russian crude, which now account for roughly one-third of its total oil intake. This shift strengthened India’s refining margins but triggered political pressure from Western governments throughout 2025. Europe , following its embargo on Russian oil, sources roughly one quarter of crude imports from Africa and over one fifth from the United States. Middle Eastern producers, including the UAE, have also increased volumes into European markets. The United States remains a substantial crude importer at approximately 6.6 million barrels per day, despite its position as a top global producer. The U.S. primarily imports heavy crude grades from Canada to meet refinery specifications, while exporting lighter grades and refined products. Beyond trade redirection, the supply landscape itself is expanding. New non-OPEC producers are gaining influence. Brazil, Guyana, and Canada are collectively expected to add around 2.4 million barrels per day of supply by 2026, intensifying competition and reinforcing a well-supplied global market. At the same time, oil demand growth continues to tilt eastward. Consumption in Europe and Japan remains subdued due to efficiency gains and slower growth, while China and India continue to drive incremental demand. This reinforces Asia’s central role in global oil flows and strategic planning.

Entering 2026: A More Disciplined, Stable Global Oil Market

January 7, 2026
A shift toward structured supply, disciplined capital allocation, and clearer pricing signals for producers and buyers alike. Published in Abu Dhabi, 07 January 2026 11:49 am (GST) As the global energy sector moves into 2026, one thing is becoming increasingly clear: oil markets are entering a more structured and disciplined phase. After several years marked by sharp volatility, geopolitical shocks, and shifting narratives around energy transition, the current environment is defined less by uncertainty and more by strategic positioning. Demand has proven resilient across key sectors including aviation, petrochemicals, power generation, and emerging markets. At the same time, supply growth has remained controlled, with producers prioritising capital discipline and long-term stability over volume expansion. This balance is setting a constructive foundation for the year ahead. In the Middle East, and particularly the UAE, energy markets are benefiting from clarity of direction. National oil companies continue to invest across upstream, downstream, and infrastructure projects while maintaining a pragmatic approach to energy transition. Rather than moving away from hydrocarbons, the focus is on optimisation, efficiency, and reliability. This approach is increasingly attractive to global buyers seeking secure, long-term supply in a fragmented world. Recent geopolitical events have reinforced the importance of jurisdictional stability rather than disrupting market fundamentals. While headlines can introduce short-term volatility, the oil market has shown an ability to absorb shocks without significant dislocation. This reflects both improved supply management and a deeper understanding among market participants of underlying demand dynamics.