The August Brent Futures flat price has had a strong afternoon, following an initial flat period from 12:00 BST to 14:00 BST. The price rallied from $84.20/bbl at 14:05 BST to $85.25/bbl at 16:20 BST, after which it has retraced to below $85/bbl. It sits at $84.75/bbl at 17:40 BST (time of writing). New York Federal Reserve President John Williams has reportedly stated that he expects interest rates “to come down gradually over the next couple of years” and that the US economy is moving “in a very strong sustainable path”. In addition, while consumer retail sales in the US disappointed markets by barely rising in May alongside a revision lower in previous months, US factory output climbed 0.9% m/m (exp: 0.3% m/m), boosting support to risk assets, including oil. A Ukrainian drone strike caused a fire in a fuel tank at an oil terminal in Russia’s port of Azov. The port has two oil product terminals, DonTerminal and Azovproduct, which handled around 220kt of fuel for export from January to May 2024. In the Middle East, the United States is attempting to avert an escalation of conflict between Israel and Lebanon’s Hezbollah movement in the aftermath of a cross-border fire between the two groups along Lebanon’s southern frontier. Singaporean authorities are struggling to clean up a major oil spill that blackened the city-state’s southern coastline following an accident that led a dredging boat to crash into a Singaporean fuel ship. Finally, the market will await API stats on US oil inventories due today at 21:30 BST. At the time of writing, the front and 6-month spreads are $0.78/bbl and $3.76/bbl, respectively.
