Price Performance Indicators

• In a week (20/6 - 24/6) the price of ICDX’s crude oil weakened by almost 3 percent.   
• The highest volatility reached 3.56 percent. 

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Market Review

Oil prices for the week ending June 24 closed nearly 3 percent. Some of the negatives that hinder prices include the European Union (EU) plan to implement further sanctions on Russia, where this topic will also be the main topic of discussion at the G7 meeting which will take place from 26 - 28 June 2022.

From the US, President Joe Biden urged major energy producers to increase their production immediately to curb the spike in gasoline prices, which have averaged more than $5 a gallon. In addition, Biden also proposed that the federal gas bill of $18.4 cents per gallon for gasoline could be deferred for the next three months through September, and a temporary suspension of state fuel taxes, which are often higher.

Meanwhile, Libya's oil production in the past week has increased to 800,000 bpd, said Energy Minister Mohamed Oun (21/6). Previously, due to political tensions and protests in oil fields and ports, production in the country that owns Africa's largest oil reserves fell to 100 thousand - 200 thousand bpd on June 13. At the beginning of the week (20/6), Oun had reported that production had increased to around 700 thousand bpd.

Market View

OPEC+ Meeting and Continuation of Production Pact

OPEC and its allies are scheduled to meet on June 29-30 to decide on production quotas for August. At last month's meeting, OPEC+ agreed to increase production by 648 thousand bpd in July, equivalent to 0.7% of global demand. This meeting will be the focus of the market because the two main OPEC producers, namely Saudi Arabia and the United Arab Emirates (UAE) are reported to have approached their production capacity limits (28/9). In addition, the current production policy of OPEC and its allies will end in September.

Russia Gets Substitute Market, European Supply Tighter

Russia has been increasing fuel sales to Africa and the Middle East region after the European Union (EU) has slowly reduced imports of Russian crude oil and fuel since March and agreed to a full embargo that will take effect at the end of 2022. Overall, the monthly supply of fuel from Russia to the African region has reached about 200 thousand tons over the last few months and nearly 500 thousand tons for destinations in Oman and the UAE. The shift in the market for the sale of Russian energy commodities also indicates the potential for tighter energy supply in Europe, considering that so far Europe has not been able to find alternative suppliers to lose Russia's energy supply.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research