- Oil heads for a second straight weekly loss amid supply rebound and demand woes
- September ’23 WTI gained $1.07 this morning to trade around $80.12/Bbl
- Markets await Fed Chair Powell's remarks on Friday for indications about the outlook of interest rates
- The US dollar surged to a ten-week high, making dollar-denominated commodities expensive for holders of other currencies
- Furthermore, China introduced relaxed mortgage policies to address its declining property market
- Despite US sanctions, Iran's oil minister expects the country's crude output to reach 3.4 MMBbl/d by September's end
- Turkey and Iraq's Kurdistan region are continuing discussions on northern Iraqi crude oil exports after failing to agree on restarting exports this week
- Additionally, US-Venezuela talks on easing sanctions for fair elections next year are also weighing on crude prices
- Recovery of fragile OPEC nations could prompt more cuts, Citi warns (Bloomberg)
- The 'Fragile Five' - Iran, Iraq, Libya, Nigeria, and Venezuela - are set to add an estimated 0.9 MMBbl/d this year and at least the same in 2024, estimated Citi
- "All of a sudden, they are sources of growth, and they will be sources of growth for five, four years — or maybe even longer in the case of Iraq and Venezuela,” said Citi’s Ed Morse
- He added that demand growth may be limited by China's slowing expansion
- As a result, core OPEC may face pressure to cut output further, which is already at a two-year low
- US-Iran subtle diplomacy boosts Tehran's exports to a five-year high (Bloomberg)
- US officials privately acknowledge relaxing some sanctions on Iranian oil sales, leading to Tehran's highest production in five years to around 3 MMBbl/d in July
- "It's about cutting deals for additional oil," said Helima Croft of RBC Capital Markets, emphasizing the aligned U.S. and Iranian interests in expanding market supply
- However, Iran's ability to maintain or boost exports hinges on extracting more oil from storage. They've used 16 MMBbl this month, with 80 MMBbl left, says Kpler
- Iran, with few buyers, is increasingly reliant on China. Shipments to China are at a decade-high of 1.5-2 MMBbl/d, according to Kpler and TankerTrackers