What Are the Technical and Fundamental Outlooks for Oil Prices?

The technical picture is very clear, yet unresolved. There’s also a debate over reserves and fundamentals.

The Technical Picture Brent

• Declining Wedge: Expected Direction Up
• Ascending Channel: Expected Direction Up
• Symmetrical Triangle: Indecision

A symmetrical triangle is a popular technical analysis chart pattern that forms when an asset’s price consolidates, creating a series of lower highs and higher lows. It indicates market indecision, where buyers and sellers are in equilibrium until a decisive breakout signals the next major price trend.

“Oil prices decline. If WTI breaks the $90 recent support, it is likely to fall like a rock.”

Technically speaking that is correct although I like fatter crayons, say $86.

What Lacalle did not say is that a breakout above $100 implies the opposite.

The Technical Picture Brent

The Brent picture is similar, but not quite as symmetrical. Everything looks like indecision.

Crude Drawdown?

Anas Alhajji says there is no crude drawdown. Exxon, Chevron, and official measures say there is.

Exxon Warns of $150 Crude. Here are the Supporting Charts

Global observed crude levels are at record low levels. Implications are ominous.

On June 1, 2026, I commented Exxon Warns of $150 Crude. Here are the Supporting Charts

Global Crude Inventory Chart Notes

• Data is from JODI (through March 2026)
• April is based on the May IEA Oil Market Report
• May is preliminary estimate based on continued aggressive draw pace and industry reports (Exxon, etc.)

The JODI data contains 119 countries, some minor countries not reporting.

I downloaded the data, converted to Excel format and totaled the inventory reports by month to produce the above chart.

I asked Grok what to make of the difference of opinion.

Grok on the Divergence

This is classic oil-market data war. Both of you are using credible sources, but disagree on what is being measured and where.

1. Data source & methodology gap
   • Your side (Exxon/IEA/JODI): official government-reported “observed” inventories. These tend to lag, can be revised, and often emphasize OECD or “visible” stocks.
   • Anas’s side (Kpler/EOA): independent tanker-tracking, satellite, and port data — more real-time, more “physical molecule” focused. Kpler is widely respected for spotting floating storage, rerouting, and unreported builds.
     → Kpler is currently saying the commercial barrel count is not in free-fall; it’s actually built a bit.
2. Commercial vs. total / SPR
   Exxon explicitly called out commercial inventories running down. Anas’s chart is also commercial — and it’s up. That’s the most direct contradiction. If Kpler is right, Exxon’s warning looks premature or regionally focused rather than globally apocalyptic.
3. The China wildcard + location, location, location
   A 6 mb/d demand drop from China is enormous — it’s like removing a major importer overnight. That alone can flatten global inventory draws even with Hormuz disruptions. Plus, barrels stranded in the Gulf (Iraq, etc.) don’t help refiners in Europe or Asia who are paying up for rerouted or alternative crudes. Aggregate global numbers can look “fine” while regional tightness (and freight costs) still push prices higher.
4. Timing
   Your post was June 1. Anas’s chart reflects “now” (June 4). The April/May draws you cite may already be reversing as pre-builds unwind and China’s lower demand shows up in the numbers.

Alhajji has a strong case that the headline “global inventories are crashing” narrative is overstated or at least premature. The Kpler picture suggests the market has more cushion (or at least more hidden supply/demand rebalancing) than the IEA/Exxon framing implies.

That helps explain why we haven’t seen the vertical spike to $150 yet despite the geopolitical shock.That said, your post isn’t wrong — it faithfully reports what Exxon (a company with massive skin in the game) and the IEA are signaling, plus the JODI/IEA draw numbers that were real through April.

Physical tightness in the right basins, product inventories, and the sheer cost of rerouting around Hormuz can still create localized squeezes and volatility even if the global commercial total is flat-ish.Oil markets love these data fights because no single source is perfect.

Right now the Kpler commercial inventory chart is the strongest evidence against an imminent $150 blow-off top. If it holds up over the next few weeks, the “mirage” label sticks and the near-term price risk is lower than Exxon’s model suggests.

We’ll know soon enough — inventories are reported weekly/monthly, and the physical flows don’t lie forever. Your charts nailed the bullish risk case; Anas just dropped the counter-chart that says “not so fast.” Classic Mish vs. energy-data-skeptic debate. I’m watching the next IEA/Kpler updates with interest.

What Else Is in Play?

That’s a key question. The drawdown is big crowd can be right, but if there is a Mideast deal between Trump and Iran that opens the strait, the price of oil can rise significantly anyway.

My unpopular take is there will be a deal, on terms favorable to Iran (the whole world actually, excluding Benjamin Netanyahu and the US warmongers).

Alternatively, Alhajji could be right, but if a major escalation breaks out, oil prices would surge.

Thus a breakout in either direction does not necessarily resolve the question as to which view is correct.

No Playbook Theory

Abdulaziz bin Salman Al Saud Saudi Minister of Energy

In the midst, not probably but definitely, of the biggest energy crisis the world has ever seen, I haven’t uttered a single word. And I intend to maintain that record simply because I believe that being silent is a type of talking.

For me to be silent is an admission, a humble admission of the fact that I don’t know what will happen, not tomorrow but even in half an hour time. So, if you don’t know what will be happening, you might as well say, I don’t know it.

There are so many moving parts, there are so many unknowns, there are things that you think are a reality but then you wake up in the next morning and the reality is no longer a reality. It’s a pipe dream or it’s an imagined hope of wishful thinking. If you don’t know it, be silent.

China’s Storage Levels

Part of the uncertainty is le level of China’s reserves.

I asked Grok “Does anyone really know China’s storage levels?”

No, no one outside China’s inner circle has precise, verified numbers on its total oil storage levels. China treats detailed inventory data as a national security matter and does not publish comprehensive, timely official figures like the US (EIA weekly) or IEA/OECD countries.

Why the opacity?

• Official policy: Total stocks (commercial + strategic) are not disclosed. The government reports some high-level import/refining data via Customs and NBS, but not storage movements. Analysts call this a “state secret.” jkempenergy.com
• Estimates rely on proxies: Implied builds from imports minus refinery runs + exports + demand, plus satellite imagery, tanker tracking, port data, and partial local reports (e.g., Shandong teapot refineries).

Independent firms like Kpler, Vortexa, Kayrros, and agencies like the EIA provide the most credible estimates:

• Total (strategic/govt + commercial): ~1.4 billion barrels as of late 2025/early 2026 (EIA). This includes ~360 mb government-held SPR-like and ~1 billion commercial (refineries, tanks). eia.gov
• Onshore commercial crude: Peaked near 1.22–1.25 billion barrels in early May 2026, then started drawing ~1 mb/d as imports collapsed. reuters.com
• Builds were aggressive in 2025 (~1.1 mb/d average addition) and continued into early 2026 pre-disruption, using cheap Russian/Iranian barrels. jkempenergy.com

These are estimates, not audited counts. Discrepancies exist between sources (e.g., Kpler vs. Vortexa on exact draw rates or floating storage), and underground caverns or unreported tanks add further uncertainty.

Recent context (Hormuz disruptions)

China pre-built stocks heavily, then slashed seaborne imports to decade lows (~6.5–7 mb/d in May) while drawing commercial inventories to cushion refiners. This has absorbed some global tightness without panic. Even here, trackers differ slightly on the pace of the draw. reuters.com

Bottom line: Kpler/Vortexa/EIA give us a good enough picture for market analysis (China has a massive buffer, equivalent to 3+ months of imports at normal rates), but it’s not exact or real-time like Western data. This opacity fuels debates like the one between your Exxon/JODI view and Anas’s Kpler charts — China’s “hidden” cushion is a big reason global aggregates can look misleading. We’ll get clearer signals only indirectly, via sustained import behavior and price action.

The technical charts are an excellent embodiment of this uncertainty.

I still maintain this view: Trump still has the same three options he has had since the ceasefire started on April 7, 2026.

Trump’s Three Options

1. Military Escalation
2. Wait Iran Out
3. Agree to a Deal Acceptable to Iran

Military Escalation Option Is Flawed

A military operation to remove Iran’s nuclear material could take years with no guarantee of success. Indeed, I would expect this to fail just like we failed in Afghanistan and Vietnam.

The US production of defense systems is running low. The US and the Mideast is defending against $30,000 drones with much more expensive options that are in short supply.

Importantly, it is Iran, not the US, with huge escalation threats. Iran, if attacked, could go after desalinization plants in the region. Literally, the entire nation of Saudi Arabia would have to evacuate in days if its desalinization plants were hit.

Trump seems resigned to the above facts, which is why a ceasefire is in place.

Trump has learned nothing from history. Iran has much higher tolerance for pain than Trump expected.

Never before has a blockade worked. It inevitably increases the resolve of those being attacked. In this case, Trump and Israel killed the Iranian leadership who were willing to negotiate.

Waiting Iran out is not an option because Iran has chosen to wait the US out. And Iran has a much higher tolerance for pain.

Agree to a Deal Acceptable to Iran

When you throw away every option that doesn’t work, you are left with options that will work. That is option three, no matter how distasteful.

It is Trump who is desperate for a deal, not Iran.

For discussion, please see Frustrated Trump Ups Terms for a Deal with Iran. What’s Going On?

Many see this as a sign of no deal. I suggest something else.

Also see Hello. We Are Again Discussing the Terms of Trump’s Surrender to Iran

It’s only a matter of time before Trump waves the white flag.

Those are my stated opinions.

Regardless, there are many technical and fundamental reasons for oil to go in either direction from here.

But I don’t know and nor does anyone else.