Global oil markets: Brent Tops $86 on Hopes of Fed Cut in September

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Brent crude soared to $86 per barrel as better-than-expected U.S. inflation data stirred hopes of a September Fed rate cut.

The beginning of this week has seen a slight downward correction for oil prices, with anticipated damages from Hurricane Beryl turning out to be less impactful than initially assumed, however, constructive macroeconomic data have reversed that downslide. With US consumer prices falling for the first time in four years last month, the September interest rate cut became a high-probability event for the Fed, lifting ICE Brent above $85 per barrel again.

The IEA reported the lowest quarterly increase in global demand in over a year as consumption rose by 710,000 b/d in Q2, saying that China’s stellar growth is coming to an end and cutting the 2025 outlook further to 970,000 b/d.

India’s Prime Minister Narendra Modi visited Russia this week, accompanied by representatives of the country’s state-controlled refiners seeking to sign long-term import deals with Russian exporters, finalizing terms such as payment currency.

The Panama-flagged dry bulk tanker Ultra Galaxy carrying ammonium nitrates to Dar es Salaam in Tanzania ran aground off South Africa’s coast, raising the risks of a potential oil spill and pollution as salvage operations are hampered by rough sea conditions.

Having failed to purchase any SPR volumes below $80 per barrel in its last tender, the US Energy Department seeks to purchase up to 4.5 million barrels of oil to its Bayou Choctaw site in Louisiana, to be delivered from October through December.

Saudi Aramco (TADAWUL:2222), the national oil company of Saudi Arabia, attracted more than $31 billion of orders for its $6 billion bond sale, its first foray into the debt markets in three years, selling 10-, 30- and 40-year dollar-denominated bonds.

Australian mining giant Rio Tinto (ASX:RIO) welcomed the Serbian constitutional court’s ruling this week that overturned the government’s 2022 decision to scrap the planning permission for Europe’s largest lithium mine, the Jadar project opposed by local environmentalists.

Power generators across the United States burned a record amount of natural gas this Tuesday, the hottest day of 2024 so far, some 54.2 billion cubic feet per day, surpassing the previous record of 52.8 Bcfd from July 2023.

Publishing its annual Energy Outlook, UK energy major BP (NYSE:BP) announced it expects oil demand to peak in 2025 already at 102 million b/d in both its ‘Current Trajectory’ and ‘Net Zero’ scenarios, maintaining a bearish outlook on fuel consumption.

The US Department of Justice fined Marathon Oil (NYSE:MRO) over alleged air pollution violations at the company’s oil and gas facilities on a North Dakota Indian reservation, with the oil producer agreeing to pay a $241 million settlement.

The US Army Corps of Engineers and the US Coast Guard gave the all-clear for the full reopening for the port of Houston this Thursday, lifting all draft restrictions, with other Texas ports expected to resume normal operations on July 12.

China’s industry ministry issued draft rules for the solar photovoltaic industry seeking to limit the past year’s overcapacity problem, requiring a minimum capital ratio of 30% for new projects and stipulating minimum efficiency levels.

The United Kingdom’s Supreme Court reversed a 2023 decision to grant permission for an onshore well in Lincolnshire, one month after taking a similar decision over a prospective oil well near Gatwick Airport, quashing the outlook for all onshore projects.

The Marshall Islands-flagged tanker Advantage Sweet, seized by Iran more than a year ago with its 1-million-barrel cargo of Wafra crude confiscated by Tehran, is heading towards international waters after being released this week.