Crude Prices Fall on US Credit Downgrade
August 3, 2023
Crude oil prices fell sharply yesterday after news late on Tuesday that Fitch downgraded the US long term foreign currency default rating to AA+ from AAA due to rising US debt. Oil prices fell despite EIA reporting a massive drop of 17 million barrels in total US oil stocks and ADP reported private payrolls rose in July by 324,000.
Economists expected ADP to report only a rise of 185,000 new jobs in July and the 324,000 new private payrolls was above expected range of 150,000 to 280,000. This is a positive for fuel demand with US jobs strength very strong. However, this could give the Federal Reserve more firepower to raise interest rates farther to fight inflation.
Propane inventories were up 2.919 million barrels putting total US supplies at 88.623 million barrels. Last year at this time the stock were 63.614 million.
The Chief Executive of Pioneer Natural Resources said oil prices will range between $80 and $100 dollar per barrel this year and next as demand outpaces supply, citing output cuts by Saudi Arabia and underinvestment by US producers. The outlook is lower than the $90-$100 range he had forecast earlier this year.