In this weekly update, Primary Vision Network digs deeper into the oil markets and find out what the latest IEA report says about long term demand and supply trends. The Monday Macro View and Market Sentiment Tracker also looks at the Chinese oil demand, which seems to be falling. This week we also have Mark Rossano’s incredible Insights and Avik’s latest on what is happening regarding the M&A activity in the U.S.

1. Monday Macro View: Oil Demand to Fall Further – PREMIUM

The latest data from the International Energy Agency (IEA) reveals a complex picture for the global oil market, projecting lower demand growth and highlighting significant headwinds. According to the IEA’s monthly report, oil demand is expected to grow by 970,000 barrels per day in 2024 and 980,000 barrels per day in 2025, down from previous estimates of 1 million barrels per day. The slower growth is attributed to subpar economic performance, increased efficiencies, and the ongoing shift towards vehicle electrification.

2. Devon Bolsters Williston Basin Operations Through Grayson Mill Acquisition – PREMIUM

On July 8, Devon Energy (DVN), one of the largest US energy producers and private operator Grayson Mill Energy, announced an agreement. DVN will acquire Grayson’s Williston Basin business for $5 billion. The transaction will be financed by $3.25 billion of cash and $1.75 billion of DVN’s stock. Following the news break on July 8, DVN moved by -1.1%. DVN primarily operates in Anadarko, Permian, Powder River, and Western Gulf, while Grayson Mill operates in the Williston Basin. The asset acquisition is expected to be completed by Q3 2024. Click on the article to read more.

3. PRIMARY VISION INSIGHTS – ENTERPRISE

Brent prices had a nice bounce back above $86 as the U.S. headed into the core of driving season and Hurricane Beryl moved into the Gulf of Mexico. The hurricane has come and gone with no lasting impacts pushing Brent down $2 quickly. Russian exports have shifted higher once again. There has been an increase in backwardation, which is an indicator of some softness. There is a belief that the Fed will cut rates, but given the amount of liquidity that remains in the market AND new debt being pushed into the financial system- it’s near impossible to see a cut. If you aren’t reading Mark’s Insights – what else are you doing? This answers all of your important questions.

4. Market Sentiment Tracker: Global Economy is on a weak footing – PREMIUM

The U.S. economic landscape shows signs of strain. Retail sales are forecasted to fall by 0.2% month-on-month, impacted by lower gasoline prices and a cyber-attack affecting auto dealerships. China’s economic indicators reveal a mixed scenario. On the downside, the PMI dropped to a three-year low of 49.5, indicating a contraction in manufacturing. The Eurozone exhibits a complex economic picture. Germany’s industrial output declined unexpectedly in May, falling by 2.5% month-on-month and 6.7% year-on-year. The ZEW Survey predicts a drop in expectations to 41.0, influenced by political uncertainty. Read this article to see the bigger picture of the global economy.

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