Saudi Arabia and UAE Strike Oil Production Deal
July 14, 2021
Saudi Arabia and the UAE have reached a deal that will allow the UAE to increase its baseline by 480,000 barrels to 3.65 million barrels per day starting in May 2022. The market moved lower when the news first hit the wire but has rebounded slightly as the increase is less than the UAE was asking for and this deal likely keeps OPEC+ on point for quota control and a disciplined approach for adding barrels.
The API report had crude oil stocks down 4.1 million barrels, gasoline stocks down 1.5 million barrels and distillates stocks up 3.7 million barrels. If we get a decline today in the DOE report it will be 8 consecutive reports with a crude draw.
US consumer prices in June increased by the most in 13 years. The June CPI was up .9% against expectations of up .5%. This takes the year on year to up 5.4%, which is the highest since August 2008. The Core CPI (ex-food and energy) was also up .9% against expectations of up .5%. This takes the year-on-year Core CPI up to 4.5%, which is the highest since September 1991.
The IEA said the world oil inventory drops in Q3 are on track to be the largest in more than a decade, citing early draws from the US, Europe, and Japan.
The EIA reported that the US retail regular gasoline price increased 0.2% to $3.039 per gallon and diesel prices increased 0.2% to $3.338 per gallon in the week ending July 9th.
The US Federal Highway Administration said US motorists drove 273.9 billion miles in May, up 28.7% on the year from 61.2 billion miles in 2020. Travel in May was up 3.2% or 8.1 billion miles on the month.