The Aug Brent futures flat price saw a whirlwind of an afternoon. Initially, we saw a steady move upward in price action from $82.70/bbl at midday to an intraday high of $83.30 at 15:00 BST. Following this upwards price movement, we saw a dramatic tumble in price action with a notable -54c drop in a minute at 15:30 BST down to $82.67/bbl. It has since ticked lower and traded in a range between $82.00/bbl and $82.40/bbl as of 17:10 BST (time of writing). Today, the release of US CPI was held unchanged for May at 3.3%, which was less than the 3.4% that was widely expected, and May Core CPI came in at 0.2% compared to the expected 0.3%. In our view, this increases the likelihood of the rate cuts starting in September, and we will see two this year. On the back of this, we saw the US dollar index sink -0.85% and the US 10-year yield jump 1.1%. We will get a clearer outlook from the Fed later today. EIA stats also came out today, which were very bearish, particularly for both crude and gasoline markets. US crude oil inventories saw an inventory build of 3.73mb compared to the forecasted draw of -1.50mb; gasoline also saw a build of 2.56mb compared to the estimated 1.5mb build. At the time of writing, the front-month and 6-month spreads are $0.42 and $2.67, respectively.
