The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil rose by $5.28 (+4.8%) to $114.84 per barrel in June. That increase occurred within the context of a marginally stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of April’s decrease of 555,000 barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 20.0 million BPD), and accumulated oil stocks that have almost edged up to the bottom of the five-year-average range (June average: 417 million barrels).
Selected
highlights from the 1 July 2022 issue of OilPrice.com’s Oil &
Energy Insider include:
“As uncertainty builds around the supply capacity of OPEC+ and oil demand rages on despite expectations of demand destruction, bullish sentiment is building in oil markets,” wrote Tom Kool. “Now, to add to that bullish sentiment, another form of supply disruption is springing up around the world: strikes. Operations at France's Fos Refinery were halted by strikes and Norway's offshore production was heavily impacted by them as well. It seems the oil market is under siege from all sides, from fundamental tightness to underinvestment, disruptions related to the war in Ukraine, and now strikes.”
OPEC+ Summit Fails to Impress. OPEC+ agreed to maintain a 648,000 b/d increase in its production
target for August, keeping its commitment unchanged despite increasing evidence
that spare capacity within the oil group has thinned to its lowest level in years.
US Supreme Court Limits Federal Emission-Setting Powers. In a blow to US President Biden, the US Supreme
Court ruled
that the Environmental Protection Agency does not have authority to regulate
greenhouse gas emissions from existing coal- and gas-fired power plants.
Iran Nuclear Deal Negotiations Fall Apart. According to US officials, as reported by Reuters,
the odds of reviving the Iranian nuclear deal are even lower after the Doha
talks held this week than before, describing the negotiations as "treading
water."
Fossil Fuels Make Roaring EU Comeback. With Europe's statistics for 2021 published by
Eurostat, fossil fuels have once again
become the largest source of power generation in the European Union, driven
largely by a 4% year-on-year increase in gas utilization despite its soaring
price.
Libya Declares Force Majeure at Key Oil Ports. After the calls of Libya's National Oil Company were largely ignored, it declared force majeure at the Es Sider and Ras Lanuf ports due to ongoing protests, curbing potential export capacity to a mere 400,000 b/d, a third of the country's exports in February.
For
other oil-related headlines, see the 5 July 2022 edition of The Energy Bulletin Weekly.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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