- Oil trades higher as supply shortage risks counter economic worries
- August ’23 WTI gained 58c this morning to trade around $76.33/Bbl
- Russia’s crude exports fell to a six-month low in the four weeks ending July 16
- Crude has been trading range-bound since May as the market weighs China’s slow recovery against OPEC+ supply cuts and potential end to Fed rate hikes
- China's NDRC plans to implement policies to grow consumption, potentially driving up oil demand
- Additionally, cooling inflation in Canada and UK boosts market sentiment
- Russia’s flagship crude dips below the $60/Bbl G7-price cap (BBG)
- Russia's Urals crude oil fell back below the $60/Bbl price cap imposed by the G7 countries to constrain Russia's funding for its Ukraine conflict
- After exceeding the cap for the first time last week, it fell to $58.59 and $59.09 in Baltic and Black Sea ports, respectively, according to Argus
- The G7 cap, effective since December 5, had not been surpassed by the Urals until last week, amidst an oil market tightened by disruptions in Libya, Nigeria, and supply curbs by OPEC+
- Market participant optimism rises following Saudi's supply cuts (Reuters)
- Over seven days ending July 11, hedge funds and other managers bought 115 MMBbl across six major petroleum futures and options contracts, indicating a significant shift in traders' risk assessments
- Following Saudi's extended 1 MMBbl/d cut, fund purchases rose from 282 MMBbl on June 27 to 445 MMBbl by July 11, driving bullish over bearish positions to 2.98:1
- Although fund managers remain cautious about future oil prices, the recent supply cuts may have eased the extreme market pessimism