By Ron Bousso, Reuters Open Interest Energy Columnist

Hello Power Up readers,

I am back after a busy and fascinating week at the Adipec energy conference in Abu Dhabi. Many thanks to Gavin for filling in for me last week!

The conference was an enormous gathering of oil and gas producers, buyers and traders, with power and renewables firms making up a much smaller percentage of the guest list.

What was the mood? In a word, bullish.

The tone was set from the get-go with a unified opening message from the CEO of the UAE’s national oil company Adnoc, Sultan al Jaber, and U.S. Secretary of Interior Doug Burgum: there is no energy transition, only energy addition.

The world will need all the sources of energy it can get to feed growing demand, they said. Indeed, al Jaber forecast that renewables capacity will double between now and 2040, but oil and gas consumption will continue to grow.

Needless to say, this is a worrying backdrop as world leaders and scientists gather in Belem, Brazil for the COP30 climate summit, the two-week conference focused on curbing climate change.

Interestingly, most of the oil executives at the conference – bullish about the long-term outlook for their business – were also not particularly fazed by the growing turbulence in the near term. Many executives argued that the IEA’s forecasts of a large oversupply in the oil market were largely overdone and that demand remained robust.

Glut or no glut? The coming months will show who is right.

Until then, oil prices have been stuck in a narrow range of $60 to $70 a barrel for months. I argued in today’s column that while this range has helped U.S. President Donald Trump significantly ratchet up economic pressure on Russia by sanctioning its two largest oil companies last month, it doesn’t help other producers. There’s more on this below.

Here are some more headlines:

I love to get your thoughts and comments, so don’t hesitate to contact me at ron.bousso@thomsonreuters.com or follow me on LinkedIn.

Oil prices have oscillated in a relatively narrow range of $60 to $70 a barrel in recent months, reflecting both warnings over rising oil supplies as well as concerns about trade wars and geopolitical conflicts.

While this may be a sweet spot for U.S. President Donald Trump, it is a ‘no man’s land’ for oil producers.

Crude prices hit the low end of this range in mid-October, enabling Trump on October 22 to follow through on his threat to slap severe sanctions on Russia's two oil giants Lukoil and Rosneft, which account for around 5% of global output.

Trump likely calculated that the escalation of the economic warfare on Moscow would not lead to severe disruption and price spikes since the oil market is today oversupplied.

At the same time, with prices in the current range, the United States’ status as the world’s top oil producer remains unchallenged. The U.S. Energy Information Administration in October boosted its forecasts for 2025 production by 100,000 barrels per day to 13.5 million bpd, while also increasing next year’s output forecasts.

Is the U.S. president right to be optimistic that prices will remain rangebound?

It depends on who you ask.

The International Energy Agency is forecasting a huge oversupply of 4 million bpd next year, nearly 4% of global demand, which could crush prices, forcing many producers to scale back output dramatically.

But the world’s energy leaders do not seem overly worried.

That is partly because of disagreements about demand. While the IEA expects consumption to grow by 700,000 bpd this year, OPEC analysts peg growth at nearly double that rate at 1.3 million bpd. China's huge stockpiling this year, for which Beijing does not provide any data, has further confused the demand picture.

Graphics are provided by Reuters.

Most Western oil majors are signalling that they don’t expect to see a dramatic shift in prices in the near future.

Many big U.S. shale oil producers, including Exxon Mobil, Chevron and ConocoPhillips plan to continue growing output in the coming years.

Exxon, the largest U.S. oil producer, last month increased its 2025 production forecast in the oil-rich Permian basin by 100,000 barrels of oil equivalent per day to 1.6 million boed, while maintaining 2027 output at 2 million boed.

Chevron also grew its Permian output in the third quarter and plans to maintain output at 1 million boed for years.

Does this mean that everyone will be happy if prices remain within today’s narrow band? Hardly.

Many OPEC producers require oil prices far above the current range in order to balance their national finances. Saudi Arabia's fiscal breakeven stands at $92 a barrel, according to the International Monetary Fund.

But the current price range is also problematic for the oil market as a whole. Until prices breach the floor of the current range, the supply-demand balance will remain in limbo, at risk of a violent correction if OPEC’s optimistic demand forecasts do not pan out.

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