Crude Extends Rally After Large API Crude Stock Draw

Crude rallied overnight with further concern for a tighter market after the API US crude inventories last night showed a large 15.4mbbls draw and further draw at Cushing. If the crude draw is confirmed in the EIA due out later today, it would be the largest stock decline since 1982.

• Brent OCT 23 up 0.9% at 85.68$/bbl
• WTI SEP 23 up 0.9% at 82.14$/bbl
• Gasoil AUG 23 down -0.4% at 908$/mt
• WTI-Brent up 0.05$/bbl at -4.03$/bbl
• Crude has seen a steady increase from a low of 78.2$/bbl on 18 July supported by OPEC+ supply cuts and improving economic expectations with speculation for slowing US Fed tightening and potential stimulus measures in China.
• Saudia Arabia is largely expected to extend the voluntary 1mbpd output cuts into September and could also raise its price for Arab Light crude to Asian refiners for a third month. Based on timings from previous months, announcements could be expected at some point this week.
  • Brent OCT 23-NOV 23 up 0.03$/bbl at 0.47$/bbl
  • Brent DEC 23-DEC 24 up 0.25$/bbl at 5.12$/bbl
• The tight supply is reflected in the strong curve backwardation with the Dec23-Dec24 spread following the front month rally to the highest since April and the prompt WTI spread still holding near the highest since November.
• Diesel cracks are holding steady and gasoline just slightly lower after API data last night suggested further inventory draws. Diesel rallied again yesterday to extend the recent trend to the highest since early February amid tight supplies and low stocks.
  • US gasoline crack down -0.4$/bbl at 39.54$/bbl
  • US ULSD crack up 0.1$/bbl at 46.29$/bbl