Blinken leaves Middle East without ceasefire deal
August 21, 2024
The continued talks about the ceasefire allowed energy price to finish lower yesterday despite what I would say was an uninspired day of trading. The energy markets are basically congested in uncertainty.
US Secretary of State Anthony Blinken has left the Middle East without a ceasefire deal. We will see how the market processes this news.
The majority of economists polled by Reuters expect the Fed to cut interest rates by 25 basis points at each of the 3 remaining FOMC meetings this year. This could spur US oil demand and growth.
The API inventory report called crude oil inventories up 347,000 barrels, gasoline inventories down 1.043 million barrels, and distillates down 2.247 million barrels.
The average estimates from the Bloomberg survey from the DOE is that crude stock will be down 1.855 million barrels, gasoline down 1.315 million barrels, and distillates down 443,000 barrels.
Goldman Sachs in a research note to client this week noted that “soft China oil demand and downside risks to China GDP growth strengthen our view that risks to our $75 – $90 range for Brent crude oil in 2025 skew to the downside.” The investment bank now expects Brent falling to $68 per barrel by late 2025 versus a $81 base case if Chinese oil demand remains flat. Goldman saw Chinese oil demand growing by only 200,000 barrels per day over the first six months of the year, while demand this summer has turned negative versus a year ago.
The average estimate for today’s propane inventory update it to see stocks increase by 1.38 million barrels. The five-year average for this reporting week is a build of 1.853 million barrels.
Experts at Goldman Sachs and Wells Fargo are predicting that the preliminary benchmark revision today will show that the economy created between 600,000 and 1 million fewer jobs than what was reported, according to Bloomberg News. Economist at JP Morgan Chase foresee a downward revision of around 360,000.