Oil Summary at European Close: Crude Up Modestly

Oil prices are up modestly, adding to yesterday’s gains as the market awaits tomorrow’s FOMC meeting.

• Brent AUG 24 up 0.2% at 81.78$/bbl
• WTI JUL 24 up 0.1% at 77.82$/bbl
• The global oil demand growth forecast for 2024 remained unchanged from last month at 2.2mb/d, according to the latest OPEC monthly oil market report.
• The crude options put skew remains unchanged this week with implied volatility falling following market price swings last week. Market focus this week is on the global oil demand outlook ahead of the US Fed meeting and upcoming industry reports.
• Saudi crude exports to China are expected to fall for a third straight month in July to about 36mn bbls according to Reuters sources.
• After a period of falling Saudi crude exports to Asia, the reduction in OSPs in conjunction with weaker flows from the Atlantic could support a recovery in buying interest according to Vortexa.
• US oil production could decline about 1mb/d by the second half of 2025 unless rig counts rise, according to Adam Rich at energy investor Vaughan Nelson cited by Bloomberg.
• Russia’s four-week average crude exports rose in the period to June 9, ending a four-week run of declines, according to Bloomberg.
• Azerbaijan’s oil production in Jan-May was 12m mt, down 5.5% on the same period in 2023, according to Interfax.
• Global crude inventories are higher than expected and current supply/demand balances will likely weaken after Q3 based on current trends according to a Morgan Stanley research note this week.