- U.S. Treasury Secretary Janet Yellen travels to Asia next week to meet with officials of Japan, South Korea, and other G20 economies. (Reuters)
- Yellen intends to head to Asia to gain support for a proposed price cap on Russian oil
- While the European Union is preparing to implement a phased embargo on Russian oil, Yellen is reportedly in favor of a price cap as a method to avoid future price hikes that might prompt recessionary behavior
- U.S. crude stocks climbed by a massive 8.23 MMBbl in the week ending July 1 to 423.8 MMBbl, according to EIA
- Nationwide gasoline inventories fell 2.5 MMBbl to 219.11 MMBbl over the same period
- Distillate stocks also saw a draw of 1.27 MMBbl to 111.14 MMBbl for the week ending July 1
- Product supplied for gasoline, the EIA's proxy for demand, climbed to a year-to-date high of 9.41 MMBbl/d, while product supplied for distillates surged 810 MBbl/d to 4.38 MMBbl/d, a 15-week high, and more than 16% above the five-year average
- Asian refiners have already secured significant volumes of U.S. oil since demand is growing in Asia because of good margins (BBG)
- Three buyers in South Korea and Japan snatched up around 8 MMBbl of U.S. oil for arrival in October
- This was followed by increased costs for equivalent Middle Eastern substitutes like Abu Dhabi's Murban, which last week hit a record premium over U.S. oil futures