August 2022 - Portland Fuel

Monthly Pricing - 01/08/2022

Brent Crude started July at $112/bbl, hitting a low of $99/bbl on the 14th of July as concerns of a global recession alongside resurging COVID-19 cases in China weakened demand, before climbing back to $110/bbl by month-end.

GBP traded at $1.20 against USD at the beginning of July, hitting a 2-year low of $1.176 mid-month amid a looming recession and political uncertainty, before closing on $1.21.

The G7 continued discussions of a potential price cap on Russian oil throughout July, as the US treasury remain optimistic of a price cap being introduced by December to avoid a price spike.

Price Drivers

Supply OPEC+ increased its production quotas by 600,000 bpd for July and August, following pressure led by the US and President Biden to increase supply. The European Union agreed to ration gas and ensure sufficient winter gas supply, amid Russian supply concerns.

Demand The EIA US stock reports highlighted a net increase of 6.6 million barrels of crude in July, indicating a decrease in demand. OPEC forecasted oil demand growth in 2023 to slow to 2.7mbpd, down from 3.4mbpd in 2022.

Geo-Political Ukraine and Russia agreed to resume vital grain exports from Ukrainian Black Sea ports, meanwhile Russian airstrikes continue in Kharkiv and Donetsk. The Sri Lankan crisis reached tipping point as President Rajapaksa’s dictatorial rule led to protesters storming the Presidential Palace.