Crude Edges Higher After China Data

Crude is edging higher today after China’s unexpected rate cut announcement with the 1-year MTF reduced to 2.5% from 2.65%. The rate cut preceded data showing relatively robust commodities output in July despite below expected industrial output and retail sales. Apparent oil demand in July was up 21.2% yr/yr according to Bloomberg with a 17.4% increase yr/yr in oil processing.

• Brent OCT 23 up 0.5% at 86.62$/bbl
• WTI SEP 23 up 0.4% at 82.85$/bbl
• Gasoil SEP 23 down 0% at 899.5$/mt
• WTI-Brent down -0.04$/bbl at -4.34$/bbl
• The US and UK both warned about increased risks to shipping in the Strait of Hormuz near Iran, adding to the existing tension in the Black Sea.
• Kazakhstan oil production continued to fall on 14 August according to the Energy Ministry after a power unit was shut down last week.
• Recent downside pressure has been assisted by a stronger US dollar, strong Iranian crude production and the resumption of crude exports from the Nigerian Forcados terminal.
  • Brent OCT 23-NOV 23 up 0.03$/bbl at 0.73$/bbl
  • Brent DEC 23-DEC 24 up 0.03$/bbl at 4.97$/bbl
• Crude curve backwardation remained strong with the prompt Brent spread setting new recent highs late yesterday amid tight supply concerns mainly driven by the extended Saudi and Russia supply cuts.
• Diesel and gasoline cracks are holding steady today after a small decline yesterday with demand concerns limiting upside despite ongoing tight supplies and low global inventories. The latest API US stock data is due for release later today.
  • US gasoline crack up 0.4$/bbl at 39.93$/bbl
  • US ULSD crack up 0.1$/bbl at 46.9$/bbl