Crude Drifts Lower on Softer Chinese Imports and Stronger USD

Crude is edging down towards the lows from yesterday after reaching a high of 86.7$/bbl earlier this month. A stronger US dollar and softer Chinese import data are weighing on the market despite the tightening global supplies due to lower OPEC+ production.

• Brent OCT 23 down -0.3% at 85.06$/bbl
• WTI SEP 23 down -0.3% at 81.7$/bbl
• Gasoil AUG 23 down -1.7% at 873.5$/mt
• WTI-Brent up 0.02$/bbl at -3.8$/bbl
• Chinese imports fell as the economy slowed amid muted summer industrial activity. Crude oil purchases fell 16% from a three month high in June back below 50m tons as refiners reduced inventories.
• The latest EIA Short Term Energy Outlook report is due out later today as the market looks to assess the impact of economic concerns and OPEC+ cuts on a supply deficit largely expected this year. The OPEC and IEA monthly oil reports are due out later this week.
  • Brent OCT 23-NOV 23 unchanged at 0.4$/bbl
  • Brent DEC 23-DEC 24 down -0.08$/bbl at 4.59$/bbl
• The crude time spreads have followed the decline in front month futures in the last couple of days, but curve backwardation remains strong with Saudi and Russian cuts expected to keep the market tight. The Brent Dec23-Dec24 spreads has pulled back from a high of 5.27$/bbl but well above levels around 2.75$/bbl from the start of July.
  • US gasoline crack down -0.3$/bbl at 36.05$/bbl
  • US ULSD crack down -1$/bbl at 43.86$/bbl
• Diesel cracks are edging lower after the strength seen in July while gasoline cracks have found some support after the recent pull back. Cracks have been supported by tight supplies, recent refinery disruptions and low global inventories although refinery outages have eased from the high levels seen in June.