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Oil Prices Stabilize As Traders Await Inventory Report
The resumption of Libya’s largest oil field El Sharara, Beijing posting weaker-than-anticipated Q2 GDP growth figures, and China’s 12% year-on-year drop in exports for June, the biggest drop since peak Covid impact in the summer of 2020, have soured the overwhelmingly bullish sentiment of the past days. Some of Monday’s losses were pared back on Tuesday morning as traders expect news of a draw U.S. inventories, keeping Brent steady within the $78-79 per barrel range.
In a three-day visit to China, US climate envoy John Kerry sought to polish ties between Washington and Beijing as both countries struggle with unprecedented heatwaves, despite China’s reticence to ring-fence climate amidst broader tensions.
Moscow refused to extend the Black Sea Grain deal brokered by the UN and Turkey last July, complaining that promises to free up Russian grain and fertilizer exports were not held, but market reaction was muted as wheat prices remained flat.
The 300,000 b/d El Sharara field in Libya restarted over the weekend after tribal protests broke out following the arrest of former finance minister Faraj Boumtari on 12 July, as the Tripoli government caved in to demands and released the politician.
The US Environmental Protection Agency denied 26 requests from small refineries that wanted exemptions from biofuel blending standards under the RFS fuel standard, saying the RFS did not impose hardship on them in 2021-2022.
Even though OPEC+’s next full alliance meeting is only scheduled to meet November 26, the monitoring committee of the oil group will convene on August 3 to assess the impact of its ongoing production cuts as oil prices started to climb again.
Japanese Prime Minister Fumio Kishida and Saudi Crown Prince Mohammed bin Salman agreed to create a JV that would develop rare earth resources in other countries, combining Tokyo’s 2050 net zero goal and Riyadh’s diversification away from oil.
Fitch has downgraded the credit rating of Mexico’s national oil company Pemex to junk territory, citing several fatal accidents that left critical infrastructure damaged and aggravated the outlook of the world’s most indebted oil firm.
Iran’s oil minister Javad Owji pledged to increase the country’s crude production capacity by 130,000 b/d over the upcoming Iranian year by March 2024, with data published in its 5-year plan suggesting the target is to reach 4.11 million b/d.
As India’s prime minister Narendra Modi visited the UAE over the weekend the two sides have agreed to allow trade between the two countries to be settled in dirhams and rupees, paving the way for non-dollar-denominated oil purchases.
The number of drilled but uncompleted wells (DUCs) in the Permian basin fell to 857 in June, down 20 compared to last month, marking the 35th consecutive decline since its June 2020 peak as companies continue to work through existing well inventory.
Two businessmen from Guyana working as contractors to build a shore base for ExxonMobil’s (NYSE:XOM) offshore fields are being investigated by the FBI, DEA, and DHS for drug trafficking, money laundering and other criminal activities.
The Japanese government will propose to create a global emergency stock for natural gas, similar to the IEA’s strategic reserve requirements for crude oil when each country has to hold stocks equivalent to at least 90 days of net imports.
Saudi Arabia’s 1 million b/d production cut for July and August is already eating into the kingdom’s oil exports, with Kpler data showing Aramco exports dropped to 6.2 million b/d in July to date, down almost 700,000 b/d compared to June and the lowest monthly figure since June 2021.
-OilPrice.com
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