- Oil heads for a second-straight weekly loss as demand fears counter supply concerns
- July ’23 WTI gained 9c this morning to trade around $71.40/Bbl
- Equities are trading lower, while the U.S. dollar modestly strengthened
- Crude futures underwent a volatile session yesterday, initially falling by over $3/Bbl due to an unfounded report of a US-Iran deal on sanctions relief
- However, prices recovered by nearly $2/Bbl after the White House and Iran denied the report
- Early in the week, crude prices traded slightly higher following Saudi Arabia's pledge to cut 1 MMBbl/d of production for July
- However, increased U.S. fuel inventories and weak Chinese export data later weighed on prices
- China's Crude Inventories Soar Amid Slow Economic Recovery (Bloomberg)
- Chinese crude stockpiles hit a two-year high of 966 MMBbl in June, as refiners increased crude purchases anticipating a rapid economic recovery, according to Kpler
- The inventory surge, above the five-year average of 858 MMBbl, is attributed to stagnant consumption and refiners idling facilities for spring maintenance
- Slow industrial activity has curbed diesel demand, and the anticipated recovery in travel demand, mostly led by jet fuel and gasoline, has not yet completely materialized
- Record Fuel Sales in India Signal Strong Global Oil Demand (Bloomberg)
- May saw record diesel and gasoline sales in India, up 13% and 11% year-on-year, indicating a bullish sign for global oil markets
- This surge followed India's better-than-expected 6.1% Q1 economic growth, benefiting the nation's state-run fuel retailers who've kept prices stable since April last year
- Standard Chartered analysts added that higher-than-expected May consumption hints at potential further growth