Brent Crude Edges Higher to Hold Above 80$/bbl

Front month Brent crude is edging higher to hold above $80/bbl and the highest since early after rallying yesterday driven by a weaker US dollar and expectation of tighter supplies due to OPEC+ production cuts. A larger than expected build in weekly US crude inventories helped to limit gains yesterday.

• Brent SEP 23 up 0.3% at 80.33$/bbl
• WTI AUG 23 up 0.2% at 75.9$/bbl
• Gasoil AUG 23 up 0.2% at 755.75$/mt
• WTI-Brent down -0.03$/bbl at -4.63$/bbl
• China June trade data showed the highest crude oil imports in three years and +11.7% yr/yr and 4.6% more than in May with oil product export volumes up +44.7% yr/yr but 7.7% down from May.
• The EIA weekly oil report yesterday showed a crude stock build of 5.95mbbl, compared to an estimated draw of -0.11mbbl.
• The Russian Urals crude price from the Black Sea port of Novorossiysk has risen above $60/bbl for the first time since the introduction of the G7 price cap in December last year.
  • Brent SEP 23-OCT 23 up 0.03$/bbl at 0.35$/bbl
  • Brent DEC 23-DEC 24 up 0.06$/bbl at 4.07$/bbl
• Crude backwardation is maintaining recent strength with support from OPEC+ member production cuts and potential China support measures. The Dec23-Dec24 spread is at the highest since late April and the prompt Brent and WTI spreads are both in positive territory after trading in contango in late June.
  • US gasoline crack down -0.2$/bbl at 36.22$/bbl
  • US ULSD crack down -0.1$/bbl at 33.51$/bbl
• Diesel crack spreads yesterday fell back from earlier gains with a big build in US weekly distillates stocks offsetting further disruption for heating oil supplies in Europe. The Shell Wesseling refinery reported a halt to heating oil supply for 5 days from 20 July and follows on from disruption to wholesale supplies from two other German oil refineries this month. Gasoline cracks rallied yesterday with US inventories staying low while the implied demand pulled back in line with previous OPIS and GasBuddy indications.