Commodities: Global
OPEC Oil Output Increased slightly by 30,000 bpd to average 27 million barrels per day (mbpd) during July, according to Bloomberg. Russia cut production by 130,000 bpd but is still over its quota of 8.98 mbpd. Iraq also cut slightly but Kazakhstan increased output. With the decline in price in July and early August, the latest meeting of top OPEC+ ministers kept oil output policy unchanged.
They are supposed to start unwinding one layer of output cuts from October, but too soon to say whether they will follow through. Crude oil tankers switched to carrying fuel, coming as refined product ships earn more because the Houthi-induced diversion to avoid the Red Sea and instead sail around Africa stretches the fleet. With the increasing tensions between Iran and Israel, there’s little sign of those freight-boosting disruptions easing, though as Iran’s oil exports continue to pick up, they have little reason to go too far in their quest for revenge. In South America, Maduro declared himself the victor in the Venezuelan elections, but the opposition released detailed results from a majority of polling stations indicating his opponent Gonzalez took nearly 70% of the vote, nearly twice Maduro’s share. Having to resort to violence to stay in power, Maduro began cracking down on the opposition and demonstrators—with at least 11 killed so far. How successful he will be in his bid to be “President For Life” remains to be seen.
US March Oil production ticked up to 13.3 mbpd as operating oil rigs rose from 479 as of June 28th to 482 as of August 2nd. Per AAA, US average regular unleaded gasoline prices slipped back to $3.48 (-1¢) as of the end of the month (see left). 
As California attorney general, Kamala Harris brought lawsuits against fossil fuel companies, prosecuted a pipeline company over an oil leak and investigated Exxon Mobil Corp. for misleading the public about climate change. Now in contention for the Democratic nomination, that track record is of deep interest to both the US energy industry and climate activists alike. A potential Harris presidency is seen being more aggressive than Biden in confronting oil companies for pollution and shutting oil and fuel production, including banning fracking. Meanwhile, Testa deliveries of electric vehicles have plateaued at around 400,000 per quarter, leading one to wonder about the future direction of EVs.
US Department of Agriculture said that crop conditions continued to be generally strong for corn and soy, with both crops in
the high 60s in the “good – excellent” condition. Scouts on the first day of the annual US crop tour projected spring wheat in southern and east-central North Dakota will produce the highest yields in tour records dating to 1994. Prices continue to be under pressure as on-farm stocks (see right) were plentiful. China had been an aggressive buyer of Brazilian soy, booking about 7.5 million metric tons in the first two weeks of July. Furthermore, Chinese soy purchases in June rose +10.7% from a year earlier at over 11 million metric tons. Farmers in Brazil were expected to harvest 90 million metric tons of second corn in the present cycle, nearly two million tons more than forecast last month. Meanwhile, China’s first purchase of US soy (only 132,000 metric tons) happened in July, about seven months after the first purchase usually takes place. Another US soy competitor, Argentina, had their season end with a final soy harvest of 50.5 million metric tons, the highest volume recorded in the last five years, even after a severe summer heat wave dried crops. The exchange had initially anticipated a crop of 52.5 million metric tons.
And in other news…
Federal Reserve Bank of Kansas said its annual central banking conference in Jackson Hole, Wyoming, will take place from August 22-24. The event, one of the premier global central bank gatherings of the year, which typically features a keynote speech from Federal Reserve Chair Jerome Powell, will focus on the topic “Reassessing the Effectiveness and Transmission of Monetary Policy.” Given the recent volatility in the markets, one must expect a certain amount of irony during the speeches.
All the best in your investing!
David Burkart, CFA
Coloma Capital Futures®, LLC
www.colomacapllc.com
Special contributor to aiSource