The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell by $13.22 (-11.5%) to $101.62 per barrel in July. That decrease occurred within the context of a stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of May’s increase of 120,000 barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 20.1 million BPD), and accumulated oil stocks that have finally edged into the bottom of the five-year-average range (July average: 425 million barrels).
Selected highlights from the 2 August 2022 issue of OilPrice.com‘s Intelligence Report include:
“One
oil major after another is announcing phenomenal quarterly earnings and
revved-up share buyback programs, with the likes of BP, Marathon, and Devon
Energy joining the list this week,” wrote Tom Kool. “Meanwhile, Brent prices
have been bogged down at around the $100 per barrel mark so far this week.
Should tomorrow's OPEC+ meeting devolve into another campaign of smoke and
mirrors [OPEC+ decided
to raise output by another 100,000 BPD starting in September], the structural
weakness in demand coming from weak global manufacturing data and Europe's
ongoing struggle to contain Russia's energy blackmail might reappear again,
pushing oil further down into double-digit territory.”
Taxing of US Crude Imports Raises Questions. President Biden's $433 billion tax and climate bill,
potentially seeing a Senate vote this week already, aims to slap a 16.4
cents-per-barrel tax on imported crude and products, raising fears
that this would inadvertently boost inflation as USGC refiners rely on heavy
crudes from Latin America and elsewhere.
US Targets Iranian Oil Trade Again. The US Treasury and State Department imposed sanctions
on a further six companies, based in Hong Kong, Singapore, and the UAE, for
allegedly facilitating trade in Iranian oil and petrochemical products, the
third round of blacklisting in the last two months.
OPEC Woos Russia to Stay in Oil Group. Haitham al-Ghais, OPEC's new secretary general, stated
Russia's participation in OPEC+ is vital for the success of the agreement,
adding that the group does not control oil prices but finetunes the market in
terms of supply and demand.
Nord Stream Blame Game Never Stops. With markets still having no idea where the ominous Nord Stream 1 turbines are, Russia has said that there is little it can do to revamp pumping along the pipeline as it continues to supply only 20% of nameplate capacity with only one turbine working.
For
other oil-related headlines, see the 1 August 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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