- Oil trades higher as concerns about a tight market offset economic worries
- August ’23 WTI gained 32c this morning to trade around $73.31/Bbl
- Equities trade higher while the dollar falls to a two-month low
- Markets await Wednesday's U.S. inflation data for potential insight into interest rate direction
- Despite a slow global economy, the IEA expects continued demand from China and developing countries, along with recent supply cuts, to sustain a tight oil market in 2H2023
- Russian oil refining surges to highest in 12 weeks (BBG)
- Russian oil refineries raised crude-processing rates in early July to a 12-week high of 5.65 MMBbl/d due to strong international fuel demand and upcoming subsidy cuts
- By late June, most refineries increased processing after seasonal maintenance, benefiting from growing foreign demand
- Despite a production cut pledge, increased refining rates and strong exports indicate that the commitment isn't fully upheld
- Additionally, Russian refiners, drawing on state subsidies, could see a 50% cut by September for budget control. H1 2023 subsidies totaled 543 billion rubles ($6 billion)
- Western Russian oil price nears G7’s price cap (BBG)
- The price of Russian oil at the western port of Novorossiysk is nearing the G7 price cap, set at $60/Bbl, for the first time since the cap's enforcement
- Urals crude traded at $57.70/Bbl on Friday, the highest since last November before the price cap was implemented, according to Argus
- Eastern Russian oil often exceeds the G7 price cap, impeding access to Western services, but Western prices have always traded lower due to loading-delivery port price gaps