- Oil falls from three-month highs ahead of U.S. Fed meeting
- September ’23 WTI lost 90c this morning to trade around $78.73/Bbl
- Equities trade higher while the dollar weakened, making dollar-denominated commodities cheaper for holders of other currencies
- The U.S. Fed is widely expected to deliver a 25-bp rate hike today
- While an expected end to the Fed's rate-hike cycle supports prices, further Fed actions could potentially weigh on oil prices and other risk assets
- Oil saw a four-week rally driven by signs of tighter supplies by Saudi and Russian output cuts, and pledges by China to bolster its economy
- Russian crude exports from western ports dive to lowest in seven months (Bloomberg)
- Russia's seaborne crude exports from western ports have dropped to their lowest level in seven months, falling by 0.63 MMBbl/d to 1.17 MMBbl/d
- Despite an increase in flows from Kozmino, a Pacific port, Russia's total crude exports fell by 0.31 MMBbl/d to a total of 2.73 MMBbl/d
- The reduction in crude exports aligns with Russia's pledge to the OPEC+ pact, coupled with a resurgence in domestic oil refining and the end of local fuel supply subsidies
- Standard Charted forecasts large supply deficits over the next two months (Bloomberg)
- A surge in seasonal demand and production curbs are expected to cause significant oil supply deficits in the next two months, said Standard Charted in a July 25 note to clients
- The bank projects supply deficits of 2.81 MMBbl/d in August, 2.43 MMBbl/d in September, and above 2 MMBbl/d in November, December, and February 2024
- The bank maintains its average Brent price forecasts at $88/Bbl for Q3 and $93/Bbl for Q4