Oil Summary at European Close: Crude Climbs

Crude has climbed today, with support from hopes of rising fuel demand during the summer. Monthly industry reports from OPEC, EIA and IEA will also be in focus this week.

• Brent AUG 24 up 1.7% at 80.99$/bbl
• WTI JUL 24 up 1.9% at 77$/bbl
• Focus this week is also likely on future demand expectations and the Fed meeting, looking for indications of future interest rate policy amid persistently high inflation.
• May production from OPEC members subject to targets fell by 110kb/d to 34.03mb/d according to Argus estimates, leaving the group still 110kb/d above target.
• Increases in spare non-OPEC+ spare production capacity are offsetting the effect of extending OPEC+ cuts, Rosneft CEO Igor Sechin said June 8, cited by Platts.
• Talks with Kurdistan region officials and industry representatives have progressed and a deal to resume oil exports via the Iraq-Turkey pipeline could arrive in the coming days, said Iraq's Oil Minister Hayan Abdel-Ghani.
• Russia’s crude production in May saw the deepest cut in a year to 9.393mb/d but still exceeds a target of 9.049mb/d, according to Bloomberg based official data.
• Floating crude on tankers stationary for at least seven days fell to 75.59m bbl as of June 7, down 19% from the highest since August at 93.84m bbl on May 31 according to Vortexa data cited by Bloomberg.
• The first Russian oil tanker attempting to deliver crude while under US sanctions made a secret STS transfer, a sign of the measures the Kremlin is taking to undermine the sanctions regime, Bloomberg said.
• Goldman Sachs expects Brent to recover to $86/bbl in Q3, as the market gets pushed into a deficit of 1.3mb/d.
• A summer oil price rally remains possible, but declines in inventories may disappoint, according to Macquarie cited by Bloomberg.