- Oil edges lower from nine-month highs following US inflation data
- September ’23 WTI lost 70c this morning to trade around $83.70/Bbl
- US CPI rose at an annualized rate of 3.2% in July, meeting expectations. The core CPI, which excludes food and energy, rose by 4.7% in July, slightly cooling from June’s 4.8% increase
- Equities traded lower, and the dollar weakened following the CPI report
- OPEC, in its August monthly report, maintained its 2023 demand forecast at 2.4 MMBbl/d above 2022 levels, as well as its 2024 forecast for another rise of 2.2 MMBbl/d
- However, the cartel’s July production was down by 0.84 MMBbl/d following the bloc’s voluntary output cuts
- Additionally, Brent and WTI’s prompt spread leaped into a larger backwardation on Wednesday, a structure that indicates a more scarce supply
- The prompt spreads rallied to their strongest since November amid concerns over the impact of prolonged heat on oil field operations in the US shale patch
- Oil tanker rates plunge amid global supply cuts (Bloomberg)
- Reductions in oil supply by major producers, including Saudi Arabia and Russia, have decreased the demand for tankers, leading to lower crude shipping rates for vessels from mid-sized Aframaxes to supertankers
- Aframax tankers, which can typically hold about 0.7 MMBbl/d, saw their daily rates plunge from over $30,000 to $5905 last month, the lowest since June 2022, according to Baltic exchange
- Russia's export cuts and supply disruptions in Iraq, Nigeria, and Kazakhstan further pressure shipping rates downward