Russia Suspends Black Sea Grain Initiative
July 17, 2023
There are two big stories this morning that the markets are digesting. One is that Russia said it will suspend the Black Sea Grain Initiative that allowed for humanitarian corridor to deliver grain from Ukraine to key global markets. Wheat price shot up after the news.
The other new was the soft GDP number from China for it second quarter. The 6.3% was a 0.8% growth from the first quarter, slower than that 2.2% quarter on quarter pace recorded in the first quarter. This brings China’s COVID recover again into question. This has put a bit of selling into the energy market overnight and In early trading, but we will see how the day progresses.
The Baker Hughes Rig Count Report had oil rigs down 3 making this the fifth consecutive week of declines. Total oil rigs are now 537 and last year there were 599. Oil rigs have fallen by 84 this year.
Friday saw some profit taking despite some supportive news from Libya and Nigeria. Some oilfields in Libya were shut down because of a local tribe’s protest the kidnapping of a former minister. In Nigeria Shell suspended loadings due a potential leak at a terminal. Reports this morning say the Libyan fields are now back open. I am sure this will be a fluid situation for a while.
Crude oil inventories increased by 5.9 million barrels week over week and are at 458.1 million barrels, 1% above the five-year average. Total Gasoline inventories increased slightly last week and stand at 219.542 million and are 7% below the five-year average. Distillate inventories increased by 4.8 million and now stand at 118.181 million and are 14% below the five-year average. Propane inventories increased 2.7 million barrels week over week and are now 26% above the five-year average.