Super-Spiked Videopods (EP76): Are Underlying Oil Balances Less Bearish Than Feared?

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We have a bonus Super-Spiked video podcast on a week we were not expecting to publish due to a college drop off. But last weekend we couldn’t resist digging into trying to understand why crude oil prices have been far more resilient in the face of unexpected OPEC quota increases and a seemingly lackluster economic backdrop. Our punchline is that while we agree there is risk of oil price softness in the back-half of this year and early 2026, underlying crude oil supply/demand balances are not anywhere near as oversupplied as consensus fears. We believe fears of a crash and potential extended bear market are way overdone. We are also gaining confidence that by the time we get to 2H2026 and 2027, oil price risk shifts more meaningfully to the upside.

The main points of difference in our more constructive outlook are (1) to disaggregate black crude oil from the more widely reported and followed overall liquids figures; and (2) to give greater consideration to OPEC Research’s Monthly Oil Market Report versus the more broadly used equivalent report (Oil Market Report) from the IEA. Over the past month, we have published several posts (here, here, and here) that have examined the long-term outlook from various macro forecasting agencies, consultants, and oil companies. We conclude OPEC Research leads the pack on being most realistic and pragmatic and was least impacted by “net zero / energy transition” madness of the prior 4-5 years. That doesn’t mean they are necessarily better at short-term supply/demand balances, but we don’t think they should be entirely ignored or dismissed either.

As a reminder, at Super-Spiked and Veriten, our focus is on the long-term outlook for energy markets and companies. We have zero interest in joining the short-term oil price guessing game that the Street and others tend to focus on. But in this case, the prevailing bearish narrative around crude oil is so pronounced and at odds with what we are seeing, we thought it worth commenting.

It remains our view that prudent risk management suggests oil companies and investors should always be prepared for the potential to have a “normal” trough, which we would describe as low $50s for a 12-month period. Our message today is not to ignore that long-standing advice. But rather to recognize that sentiment is likely way too bearish and that medium- and longer-term risks are skewed toward better outcomes than consensus narratives suggest.

Exhibit 1: Underlying “black crude oil” balances using OPEC’s MOMR appears significantly less bearish than implied “liquids” oversupply using IEA OMR balances

Source: IEA, OPEC, Veriten.

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📜 Credits

* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.

* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.

⚖️Disclaimer

I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com