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Energy Analyst - KC Energy
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Tensions within OPEC may be nearing a boiling point, and StoneX experts Alex Hodes and Trevor McClanahan think Kazakhstan is the match that ignites the fire.
In the latest episode of Focus on Fuels, Hodes, Director of Energy Market Strategy, and McClanahan, Energy Risk Manager, walk through a market landscape fraught with uncertainty. Kazakhstan's continued overproduction — roughly 300,000 barrels per day above agreed-upon levels — has strained OPEC unity. The country has flatly stated it cannot comply without damaging its wells, and plans to keep pumping despite requested caps. That stance, McClanahan warns, raises the specter of a price war within OPEC.
"The rhetoric matters here," Hodes notes. "It’s not just the numbers. It’s how the major producers react to each other’s moves."
For now, Hodes sees a solid price floor near $60 per barrel, based on production breakevens. Still, crude remains stuck below key technical levels, with $65 per barrel acting as resistance. Without a strong catalyst, neither host expects a breakout soon. The StoneX Q2 model suggests a $68 average for WTI, but McClanahan emphasizes it's a forecast, not a guarantee saying "it’s headline-driven, and emotions aren’t part of the model."
On the demand side, U.S. gasoline consumption is up, but not consistently enough to command energy prices. And geopolitics continues to cloud the picture. The Trump administration is showing signs of tariff softening, particularly with India, while Iran and Venezuela remain wild cards. Progress with one sanctioned nation might lead to ripple effects elsewhere — or not. "All it takes is a headline," Hodes points out.
In this kind of market, risk runs both ways. And as Hodes and McClanahan agree, that makes price protection and strategic hedging more critical than ever.
Explore the broader implications of tariffs, freight shifts, and trade retaliation on global energy flows in our latest white paper, “Tariffs, Tankers, and Tumbling Prices: The 2025 Oil Market Shake-Up.”
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---Written by: Andrew Catsimanes, Copywriter
---Experts: Alex Hodes, Director of Energy Market Strategy and Trevor McClanahan, Energy Risk Manager
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Safe-haven Treasuries are drawing support from two directions, a tech selloff and a slide in oil prices. Lower oil eases inflation concerns, adding a second driver to the decline in U.S. Treasury yields.
November 6 – Volatility remains high on Wall Street this morning, as we add the monthly jobs report to the post-election market correction. The Nasdaq dropped sharply on Thursday amid a fear that the Democrats taking over Congress would create major challenges for tech companies – especially those involved with AI. It’s trying to bounce this morning, but the headlines over AI risks continue to flow. Today’s jobs report should help to redirect some of that focus momentarily, but the possibility of more volatility clearly remains with us. As such, the VIX – Wall Street’s “fear index” – is trading near 27 at this hour. My observation over the decades is that commodity assets struggle to sustain rallies when the VIX is above 30, unless that asset has a strong story of its own. The dollar index is trading near 102.3. Yields on 10-year Treasuries are trading near 4.86%, while yields on 2-year Treasuries are trading near 4.53%. WTI crude oil is trading near $91, while Brent trades near $98 per barrel. The grain and oilseed sector traded mixed overnight, with wheat posting double-digit losses, while corn and soybeans were either side of unchanged in early trade.
November 5 – Stock futures are pointing to a mixed open after yesterday’s surge higher, with the Dow Jones looking to add to yesterday’s 3% gain and potentially flirt with pushing to three-month highs, while the tech heavy Nasdaq is looking at a lower open as money rotates out of tech, and the S&P 500 is caught in the middle. The VIX remains notably lower than recent weeks, though up slightly from yesterday’s close, hanging near 16.8 at the time of writing. The dollar is rebounding from yesterday’s losses amid unexpectedly strong U.S. labor market data this morning, reinforcing hawkish Fed bets, as it trades near 101.65. Treasury yields are higher to start the day as well, with 2-year yields trading at 4.618%, 10-year yields at 4.909%, and 30-year yields at 5.288%. Crude oil is bouncing after incredibly sharp losses in recent days, with nearby WTI currently up 2% on the day to trade near $89.80 and nearby Brent up 2.6% to trade near $97.10. Meanwhile, the ags are higher at the break as they look to find a rebound of their own.
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