ICE Brent crude traded just below $90 per barrel in early Asian trading, extending gains from Monday. The price strength is attributed to renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz, which have raised concerns about regional supply disruptions and complicated prospects for a US-Iran deal. Several vessels, including those linked to Abu Dhabi National Oil Co., were reportedly targeted in the waterway late last week, further fueling supply risk concerns [1].
Speculative positioning in Brent has turned increasingly bullish. Money managers increased their net long position in ICE Brent by 76,026 lots to 240,748 lots as of last Tuesday, marking the largest bullish position since early June 2026. This increase was primarily driven by fresh long positions, with gross longs rising by 51,818 lots week-on-week [1].
US drilling activity has also continued to expand. The US oil rig count rose by one to 455 active rigs last week, marking the third consecutive weekly increase according to Baker Hughes. The rig count is now 43 higher than a year ago and at its highest level since May 2025. Drilling activity has trended higher since the start of the US-Iran conflict in late February [1].
The EIA estimates US crude oil production will average 13.8 million barrels per day in 2026, up from 13.6 million barrels per day in 2025, and is expected to increase further to 14.2 million barrels per day in 2027 [1].
CONCLUSION
Brent prices remain elevated due to ongoing geopolitical tensions and supply risks in the Middle East, with bullish speculative positioning and rising US drilling activity further supporting the market. The outlook for US crude production is positive, with forecasts indicating continued growth through 2027. Overall, the market impact is high as supply concerns and bullish sentiment drive Brent prices near $90 per barrel.