The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil increased by $5.82 (+8.3%) to $76.07/barrel in July. That advance occurred within the context of a somewhat weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of May’s increase of 330,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.8 million b/d), and accumulated oil stocks that continued trending downward below the midpoint of the five-year average range (July 2023 average: 453 million barrels).
Selected
highlights from the 28 July 2023 issue of OilPrice.com’s Oil &
Energy Insider include:
Oil prices ended July on an “up” note, “fueled in part by supply concerns and in part by growing optimism about a 'soft landing' for the U.S. economy,” wrote OilPrice.com’s Michael Kern. “The strength of the U.S. economy has added fuel to the recent rally in oil prices, with the 2.4% quarter-on-quarter growth in Q2 prompting many to believe again in the possibility of a soft landing. Even though China's hoarding of crude does not necessarily look good for the upcoming months as Chinese refiners might suddenly start buying significantly less than they do now and start running down stocks, there's so far very little immediate downside” to oil pricing.
Greenpeace Picks Another Fight Against UK Oil. Environmental campaign group Greenpeace took the UK
government to court
over its holding of the 2022 exploration licensing round, saying the
authorities failed to assess end-use emissions from future hydrocarbon
production.
Chinese Oil Stockpiles Shoot Through the Roof. Boosted by all-time high imports of Russian crude
and year-on-year doubling Iranian flows, China has amassed
almost 1 billion barrels in crude inventories, the highest level of stocks in
almost three years, potentially drawing from them in H2.
Court Decision Greenlights Key U.S. Pipeline. The U.S. Supreme Court granted
the operator of the Mountain Valley Pipeline, a longtime-planned gas conduit
running through Virginia, the right to build a 3.5-mile section through the
Jefferson National Forest, dealing a blow to years of environmentalist
protests.
Heat Sends U.S. Power Prices Soaring. As U.S. electricity prices soar amidst a crippling heatwave, taking PJM Western prices to the highest since February, the operator of the Midwest's power grid was forced to declare a level-one emergency in 13 states stretching from Illinois to New Jersey.
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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