- Oil trades near its highest since April on signs of additional supply tightness
- September ’23 WTI gains 59c this morning to trade around $81.96/Bbl
- The US dollar continues to strengthen, weighing on dollar-denominated commodities
- Russia’s seaborne crude exports in the four weeks to July 30 fell to a six-month low of 2.98 MMBbl/d, down 0.9 MMBbl/d from mid-May’s peak
- Furthermore, there's speculation that Saudi Arabia may extend its 1 MMBbl/d voluntary cut into September
- However, concerns over China's oil buying slowing down due to higher prices and weaker-than-expected fuel demand, as indicated by weak PMI data this week, weighed on the demand outlook
- SPR replenishment put on hold amid high crude prices (Bloomberg)
- The Biden administration has postponed refilling the SPR due to prevailing market conditions and higher oil prices, rejecting purchase offers earlier this year, according to people familiar with the matter
- The U.S. has previously indicated a preferred purchase price of around $67 to $72/Bbl, while WTI exceeded $80/Bbl last week
- Despite this being the fourth round of bids, the DOE emphasizes its commitment to refilling the SPR, maintaining its purchase stance when beneficial to taxpayers, in coordination with Congress
- Driven by Saudi’s deep cuts, OPEC crude output tumbles by the most since 2020 (Bloomberg)
- OPEC's crude production saw its most significant decline in three years, with Saudi Arabia implementing deep cuts, causing production to drop by 0.9 MMBbl/d in July to 27.79 MMBbl/d
- Saudi Arabia enacted the majority of the pledged 1 MMBbl/d cut to buoy prices amidst a sluggish economy in China and US recession fears
- Meanwhile, Nigeria and Libya also experienced production declines due to leaks and protests, respectively