May 2023 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell in May, by $7.87 (-9.9%) to $71.58/barrel. That retreat occurred within the context of a moderately stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of March’s increase of 0.452 million barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.4 million b/d), and accumulated oil stocks that continued diverging downward from the top of the five-year average range (May 2023 average: 461 million barrels). 

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Selected highlights from the 2 June 2023 issue of OilPrice.com’s Oil & Energy Insider include:

“The lifting of the US debt ceiling, avoiding a government shutdown, has seen bullish sentiment return to the oil market, lifting Brent back above $75 per barrel and WTI above $71 per barrel,” wrote Michael Kern. “While rising U.S. crude inventories and the weak outlook of Chinese manufacturing are adding downward pressure to oil prices, the upcoming OPEC+ meeting this weekend might provide another boost for prices if the group decides to cut production.”

Europe Prepares 11th Russia Sanctions Package. The European Commission is expected to present its 11th package of Russia sanctions next week, targeting Chinese firms that shipped banned goods to Russia, banning Russian flows through the northern Druzhba pipeline and forbidding the transit of EU-bound goods through Russian territory.

Houston Refinery Shutdown Delayed. Buoyed by strong refinery margins, chemicals firm LyondellBasell said it would not shutter the 264,000 b/d Houston refinery by the end of this year and thanks to moderate maintenance spending it would extend operations till the end of the first quarter in 2025. 

Shareholders of US Oil Reject Stronger Climate Mandates. Shareholders of ExxonMobil and Chevron overwhelmingly rejected demands from climate activists that they set medium-term goals for reducing carbon emissions as Scope 3 targets, in a blow to environmentalists.

European Major Wants Synthetic Gas in the US. Indicating that the US might be gaining the upper hand against Europe in landing green energy deals, French oil major TotalEnergies announced its plans to build a large-scale $2 billion synthetic gas plant in the country, expecting it to benefit from IRA credits.

Leaks Force Halt of Norway’s LNG Terminal. A gas leak has prompted Norway’s oil company Equinor to shut down the Hammerfest LNG plant, the country's only liquefied natural gas export terminal, only several weeks after a compressor failure halted production in early May.

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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.