- Oil steady as the dollar weakens, US inflation cools, and IEA forecasts record demand
- August ’23 WTI lost 14c this morning to trade around $75.65/Bbl
- Equities trade higher while the U.S. dollar plunged to the lowest since April 2022
- June's CPI data indicated a 3% rise, the slowest in two years, while Core CPI only increased by 0.2%, below expectations
- IEA lowered its forecast for global oil demand by 0.22 MMBbl/d to 2.2 MMBbl/d for 2023
- Despite economic and rate hike headwinds, the agency expects record demand this year to substantially lower inventories in H2
- Furthermore, the agency forecasts that 70% of this record demand growth will stem solely from China
- Additionally, total oil exports out of Russia fell by 0.6 MMBbl/d to 7.3 MMBbl/d in June
- China’s crude imports hit a three-year high (BBG)
- China's crude oil imports rose by approximately 5% from May, hitting a three-year peak of 12.72 MMBbl/d
- Chinese state refiners’ returning from maintenance and independent refiners being granted more quotas aided the jump in imports
- With weak domestic demand, China's refiners, leveraging high margins, are prioritizing exports, signaling potential growth in global fuel shipments, according to JLC
- Asia turns to US oil amid Saudi production cuts and price hikes (BBG)
- About 18 supertankers carrying 36 MMBbl of US crude are heading to Asia for October arrival, indicating a rising appetite for American oil
- With Brent soaring past $80/Bbl and Saudi Arabia's supply cuts and price increases, Asian refiners are considering US shipments as an alternative
- Additionally, lower North Sea oil prices relative to middle eastern oil and freight rates hint at Asian refiners possibly sourcing more from distant European and American producers