- Oil weakens as US-Iran, Venezuela tensions ease, quelling supply concerns
- September ’23 WTI lost 31c this morning to trade around $78.58/Bbl
- Reports of the U.S. mulling on easing sanctions on Venezuelan oil weigh on crude prices, as the Biden administration seeks fair elections in Caracas (Reuters)
- Venezuela's oil exports, coupled with Iran's recent ramp-up in exports to 2.2 MMBbl/d, could ease oil market tightness
- China's economic decline, indications of extended high US interest rates, and lackluster European data curbed oil’s rally
- However, analysts expect Saudi Arabia to prolong its MMBbl/d voluntary cut into October
- Global oil stockpiles at six-year low may trigger a price rally (Bloomberg)
- Onshore global oil inventories, already near a six-year seasonal low, plummeted by 60 MMBbl in July to around 3.37 GBbl, according to Kpler
- Much of the reduction was seen in China as operating rates at state-owned processors are set to hit a record this month, signaling strong demand for crude, according to OilChem
- Meanwhile, US inventories have dwindled to their lowest since the end of 2022
- Despite economic uncertainties, oil prices have surged 15% since late June. With the ongoing reduction in stockpiles and the current backwardated structure, analysts from Goldman Sachs and ING Group indicate prices may climb further