ConocoPhillips warn oil market sentiment may be too bearish as physical supply stays tight

ConocoPhillips CEO said physical oil markets are not showing signs of the oversupply many traders fear, suggesting a potential disconnect between market sentiment and actual fundamentals.

Speaking about global crude flows, he noted that floating inventories aren’t rising, and there is no significant increase in medium-sour crude arriving at the U.S. Gulf Coast—a pattern that would typically appear if producers had large volumes of spare capacity.

“You look at the physical market, and you don’t see that playing itself out,” he said, warning that “there could be a collision coming” between bearish expectations and tighter underlying supply.

The CEO added that while investors are watching for signs of a supply glut, ConocoPhillips sees little evidence of one. “A lot of the OPEC+ increases were paper barrels—they were already in the market,” he said, questioning when or if market bearishness will materialize.

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The comments suggest fundamentals may support higher oil prices than futures imply, reinforcing a near-term bullish case for crude. A lack of visible inventory builds could pressure short positions if data continue to contradict bearish sentiment.

ps. I’m going to leave it up to readers to decide if he may be talking his book.

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Also, other industry players take an opposite view:

• Gunvor: said that while talk of an oil market oversupply has circulated before — often proving wrong — this time the narrative appears to have more credibility given current market conditions.
• Trafigura: noted that traders have been aware of an impending surplus for about a year, adding that prices are likely to fall further from current levels.

This article was written by Eamonn Sheridan at investinglive.com.