Crude Eases Lower on Lacklustre China Recovery

Brent crude is trading below the highs of 76.25$/bbl seen yesterday with global economic concerns and uncertainty over future oil demand growth weighed against tighter supplies due to Saudi Arabia and OPEC production cuts.

• Brent SEP 23 down -0.6% at 75.81$/bbl
• WTI AUG 23 up 1.6% at 70.88$/bbl
• Gasoil JUL 23 down -0.2% at 716.5$/mt
• WTI-Brent up 0.19$/bbl at -4.8$/bbl
• PMI data from China provided further evidence that growth may disappoint. The composite Caixin PMI for June fell to 52.5 from 55.6 driven by a sharp weakening in services activity as further evidence that China’s recovery is looking lacklustre.
• The market will be looking for any indications of the future production levels from Saudi Arabia when Energy Minster Prince Abdulaziz bin Salman addresses an industry conference on 5-6 July this week. Saudi are expected to announce the August OSP this week with Asian refiners expecting lower prices according to a Reuters survey.
  • Brent SEP 23-OCT 23 unchanged at 0.2$/bbl
  • Brent DEC 23-DEC 24 down -0.06$/bbl at 2.94$/bbl
• The Brent crude prompt spread is steady today after regaining ground in the last week up to a high of +0.23$/bbl yesterday. Global economic growth concerns are however still limiting the strength in the spreads with Dec23-Dec24 within the middle of the 1.7$/bbl to 3.9$/bbl range since the start of May.
• Diesel and gasoline cracks are edging higher after falling earlier this week due to weak demand concerns and returning global supplies while global inventories remain low. Increased Russian diesel output and refined product output from China are adding to global supplies with US gasoline demand boosted by the summer driving season.
  • US gasoline crack up 0.1$/bbl at 34.59$/bbl
  • US ULSD crack up 0.3$/bbl at 31.47$/bbl