The last week of July started in a somewhat upbeat manner, buoyed by rumors that the US Federal Reserve might finally cut interest rates (for the first time this decade) and that US commercial crude inventories are set for a seventh consecutive drawdown. Yet do not expect sharp movements on the last day of the month as worries about global demand slowing down are still very much present on the market, resulting in July being only the second month this year that is poised for a monthly decline, albeit a palpably less painful one that the one witnessed in May. A year or two ago the ongoing Iranian vessel seizure crisis ought to have had a more discernible effect on prices yet with so many counterbalancing actors its impact remains muted, despite staying in the headlines.
As of Wednesday, the global benchmark Brent traded around $65 per barrel, whilst the WTI was $58.5-59 assessed at per barrel.
1. ADNOC Sees Murban as Regional Futures-Based Benchmark
- The Emirati national oil company ADNOC is seen to favor a move from a retroactive price-setting approach towards a forward-based one as it seeks to extract more value out of its Murban exports and fend off arbitrage competitors.
- Up to the present day all ADNOC’s official selling prices are set on a retroactive basis, i.e. the July OSPs will be known in the first days of August.
- Yet Chinese, Japanese and South Korean refiners traditionally buy crudes 2 months in advance, rendering…