TotalEnergies Sounds Alarm: Oil Prices Surge Amid Looming Oversupply Crisis

Crude's rally hits a wall of skepticism as energy giants brace for glut.

Pump and Dump: The Oil Market's Dangerous Game

TotalEnergies joins the chorus warning that today's price surge might be tomorrow's inventory nightmare. Traders are buying the rumor—will they sell the news when storage tanks overflow?

The Speculator's Dilemma

Every barrel pumped above $80 smells like hedge fund desperation. Meanwhile, physical traders are quietly booking tankers like they're going out of style—which they might be when the music stops.

Wall Street's Petrol Paradox

Analysts keep revising forecasts upward while storage data tells the opposite story. Classic case of 'don't confuse me with the facts'—the financialization of commodities at its finest.

One thing's certain: when the oil cartel and corporate suits agree on danger ahead, retail investors should probably... diversify into Bitcoin.

Earnings fall short as LNG takes a hit

TotalEnergies’ second-quarter results showed exactly how much this environment is weighing on profits. Net income for Q2 fell 30% year-over-year to $2.7 billion. That came in below analysts’ expectations. The company also saw a 20% drop in earnings from its LNG division, hit by lower prices across both oil and gas.

Still, the group chose to hold its dividend steady at €0.85 per share. It also confirmed that it WOULD continue its $2 billion share buyback plan through the third quarter and maintained its capital expenditure guidance for 2025 between $17 billion and $17.5 billion.

But that came with a cost. Debt ROSE from $20 billion to $26 billion during the same period. Part of that came from its acquisition of German renewables firm VSB. The other part came from ramping up oil production by 3%.

The broader oil market isn’t following any clear trend either. On the same day TotalEnergies released its report, Brent crude gained $0.79 to reach $69.30 per barrel, while U.S. West Texas Intermediate rose by $0.83 to $66.08. The gains were linked to progress in trade negotiations and a stronger-than-expected fall in U.S. crude inventories.

Janiv Shah, analyst at Rystad, said, “The U.S. crude inventory draw and the trade efforts are adding some support to prices.” He was referring to Energy Information Administration data showing a weekly draw of 3.2 million barrels, which brought total U.S. crude inventories down to 419 million.

Analysts had forecast a smaller 1.6 million-barrel draw, making the figure notable.

Trade talks, inventory changes, and rising pressure on oil majors

While inventories are tightening in the U.S., the bigger picture still looks shaky. Two diplomats in Brussels said Wednesday that the U.S. and EU are discussing a possible trade agreement, which might include a 15% baseline tariff on EU imports and carve-outs for some sectors.

If successful, it would follow the same framework used in the Japan deal. But as of now, there’s no final agreement, just early momentum.

Meanwhile, energy majors like BP are also feeling the pressure. BP recently warned that it expects lower profits due to softening oil and gas prices. The entire sector is now being pulled in two directions: keep paying out to shareholders or react to weakening fundamentals. TotalEnergies, for now, seems to be trying to do both.

Global tensions are also clouding the path forward. Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said, “Uncertainty over U.S.-China trade talks and peace negotiations between Ukraine and Russia is limiting further gains.” He predicted WTI prices would remain stuck in that same $60 to $70 range, matching the outlook TotalEnergies gave.

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