Market Outlook – August 1 2023 Pricing Window

Refined Products Review and Outlook

Global crude prices rose significantly in the month of July largely due to supply tightness owing to OPEC+ production cuts and renewed optimism over Chinese demand and global growth. High inflation and interest rates in the US and  Europe and the weak economic indicators from economies like the US, EU, and China resulted in a significant slump in global crude prices in Q2. However, crude oil prices remained stable in June after they fell by about 5 percent from Q1 to Q2 2023. Prices fell significantly in April 2023, forcing some OPEC+ nations to voluntarily cut down output by about 1.2mn b/d to influence prices. This intervention by the oil-producing countries escalated prices to about USD85/bbl in the first week of April. However, prices fell significantly thereafter due to the continual hikes in US interest rates and the weak economic performance of China. Crude oil prices fell by about 13 percent from USD85/bbl in April to USD74/bbl in July.