Crude Drifts Lower After Rally on EIA Crude Stocks Draw Yesterday

Crude drifts lower after a strong rally yesterday following a bigger than expected draw in weekly US crude inventories offsetting the impact of global economic concerns and the risk of further central bank rate hikes.

• Brent AUG 23 down -0.5% at 73.68$/bbl
• WTI AUG 23 down -0.5% at 69.2$/bbl
• Gasoil JUL 23 down -0.6% at 699.75$/mt
• WTI-Brent down -0.05$/bbl at -4.48$/bbl
• The crude draw was driven by an increase in exports to back above 5mbpd for the first time since March while gasoline demand gained in line with the seasonal trend.
• The Saudi Arabia voluntary production cut for July and the potential for more practical, effective measures to boost domestic demand in China had not managed to boost prices this month. Saudi Arabia is likely to set the August OSPs next week.
  • Brent AUG 23-SEP 23 up 0.03$/bbl at -0.18$/bbl
  • Brent DEC 23-DEC 24 down -0.12$/bbl at 2.29$/bbl
• The crude time spreads followed the front month rally yesterday, bouncing off the lows from earlier in the day. The prompt Brent spread had fallen to the lowest since January ahead of the August contract expiry on 30 June and Dec23-Dec24 fell to the lowest since Dec 2021. A rally in WTI relative to Brent has brought the WTI-Brent spread back up to -4.45$/bbl.
  • US gasoline crack up 0.1$/bbl at 35.19$/bbl
  • US ULSD crack down 0$/bbl at 30.97$/bbl
• Diesel cracks are steady this week and gasoline edging higher as weak demand concerns are balanced against tighter supplies from refinery outages this month and low inventories with gasoline edging higher at the start of the US driving season. EIA data yesterday showed small gains in gasoline and distillates stocks on the week as expected.