The Sep’25 Brent futures contract gapped down at market opening to $67.54/bbl, prices climbed throughout the morning to $68.73/bbl at 11:15 BST (time of writing). The drop in price comes after OPEC+ agreed to raise production by 548 kb/d in August. Since April, OPEC+ has increased output by 138kb/d, followed by hikes of 411kb/d in May, June, and July. Reuters sources indicate that a 550kb/d increase is likely for September, completing the return of 2.17 mb/d. The total production increases since April would reach 2.47 mb/d, or nearly 2.5% of global demand. In other news, a $34 B memorandum of understanding (MoU) is expected to be signed between companies from Indonesia and the United States, including Indonesia’s state energy company Pertamina, Exxon Mobil Corp, and Chevron, according to a government official. The deal will also involve the purchase of US soybeans, corn, and cotton, as confirmed by Pujo Setio, a senior official at Indonesia’s Ministry of Economics. In June, fuel oil imports to the US Gulf Coast reached a record low of 213kb/d, down from 430kb/d last year. This drop was driven by reduced Mexican crude imports, which fell to their lowest level since April 2020, and tighter global fuel oil supplies. High-sulphur fuel oil prices rose as seasonal demand for power and US sanctions on Russian oil tightened supply. Finally the front-month Sep/Oct and the 6-month Sep/Mar spreads are at $1.20/bbl and $3.19/bbl respectively.
