Bloomberg News reports that oil was steadying following a three-day rally as the US industry data indicated further tightening crude stockpiles at Cushing’s key storage hub.
What is this All About?
West Texas International was found trading above $111 per barrel after approximately 7% was added over the last three sessions. The American Petroleum Institute reported that Cushing inventories dropped by 650,000 barrels in the past week, as per people familiar with the numbers. Stockpiles nationwide were found shrinking as well.
There has been a tightening of the global oil markets following a rebound in economic activity, with Russia’s invasion of Ukraine making the squeeze worse by upending the trade flow. OPEC+ has anticipated to rubber stamp yet another increase in modest supply for August in the current week even though struggling of the cartel has been going on to meet the targets in the current year.
Oil has been heading for the first drop in a month since November after being bombarded by fears of economic slowdown globally, but prices are seen to be in the upward trend by almost 50% in the current year. The time spreads have been implying bullish signs with a Dated-to-Frontline swap contract, which is an indicator of the key North Sea market’s strength, thereby hitting a record of more than $5 per barrel.
Bloomberg News reports that on Thursday, the Group of Seven leaders agreed that they need the ministers to evaluate urgently how the Russian oil price can be curtailed to restrict the energy proceeds that Kremlin has been using to fund the war in Ukraine. The main idea floating over the last week has been a cap of some kind.
Last week the US gasoline stockpiles surged, as per API, even though they remain low every season. The Energy Information Administration stated that the delayed weekly reports on oil would be published on Wednesday, thereby putting an end to the two-week delay triggered by the power issue.
