Skip to main content

Brent and WTI crude benchmarks notched their 6th consecutive weekly gain on Friday. Brent futures finished Friday 1.3% higher at $86.24/barrel. WTI gained 1.6% to $82.82. Extended voluntary production cuts from Saudi Arabia and Russia combined with record crude draws in the US to drive prices higher. Oil markets picked up headwinds from lackluster European economic data and the US Department of Energy’s decision to scrap its 6-million-barrel SPR purchase.


On Thursday, Saudi Arabia announced it would extend its 1-million-barrel voluntary production cut through September, maintaining production of 9 million bpd. Saudi officials said the voluntary cuts could be extended or deepened again in the coming months.

Russia followed the kingdom’s announcement with plans for a 300,000 bpd export cut in the same month. In July, Russia announced a 500,000 bpd export cut through August.

At this week’s OPEC+ ministerial meeting, members elected to maintain existing production targets, with current output cuts totaling 3.66 million bpd (~3.6% of global demand).

United States

On Wednesday, the Energy Information Administration (EIA) reported a record crude draw of 17 million barrels from US inventories for the week ending July 28th. Thus far in 2023, US crude exports averaged 4.08 million bpd compared with an average of 3.53 million bpd in 2022.

US exports have increased in recent months with the inclusion of WTI Midland crude in S&P Global Platts’ Dated Brent oil price assessments. WTI Midland is the first crude grade from outside the North Sea region included in the Platts Dated Brent benchmark.

Dated Brent is set by the cheapest crude in the basket of deliverable crude grades, and the rising influence of WTI Midland has helped cap prices based on the benchmark. According to S&P Global’s Joel Hanley, WTI Midland provided the most competitive price in at least half of the 61 dated Brent assessments from June to July 27th.

On Tuesday, the Biden administration’s Department of Energy rescinded plans to purchase 6 million barrels for the US Strategic Petroleum Reserve (SPR). Last year, the administration sold a record 180 million barrels from the SPR and hoped to repurchase crude in a $67-$72/barrel window.

Other Updates

On Thursday, the Bank of England raised its key interest rate for the 14th consecutive time by 25 basis points to a 15-year high of 5.25%. Bank of England officials warned interest rates would likely remain elevated in the face of stubborn inflation.

Britain’s inflation hit 11.1% in October 2022, and readings in June showed the rate remained elevated at 7.9%.

Quick Shots:

📉 European Business Activity Contracts

Europe’s Composite Purchasing Managers’ Index (PMI) dropped to 48.6 in July from 49.9 in June. S&P Global’s Composite PMI combines measurements in the manufacturing and services sectors. A figure below 50 indicates contraction.

Europe’s manufacturing PMI fell to 42.7 in July from 43.4 in June – the lowest reading since May 2020.

Last week, the European Central Bank (ECB) raised interest rates for the 9th consecutive time. The ECB’s deposit rate increased 25 basis points to 3.75%, and the ECB set the main refinancing rate at 4.25%.

📜 North Dakota Rejects Carbon Pipeline

On Friday, North Dakota’s Public Service Commission rejected Summit Carbon Solutions’ permit application for 320 miles of carbon capture sequestration (CCS) pipeline. The proposed pipeline would transport carbon dioxide from ethanol plants to underground storage facilities in the state.

Summit said it signed easement agreements with landowners along 70% of its pipeline route in March. The firm aims to store up to 18 million metric tons of carbon dioxide annually in North Dakota.