Crude Holding Gains On China Stimulus and OPEC Supply

Crude holds onto the gains seen yesterday up to the highest since mid April driven by tighter global supplies and stimulus plans in China. Upside is limited with the US Fed widely expected to raise rates 25bp this week with uncertainty over future policy plans.

• Brent SEP 23 up 0.3% at 82.99$/bbl
• WTI SEP 23 up 0.3% at 79.01$/bbl
• Gasoil AUG 23 down -0.7% at 818$/mt
• WTI-Brent down -0.07$/bbl at -3.98$/bbl
• China’s July Politburo statement buoyed risk appetite with increased support for the property market and plans to resolve local government debt issues. Oil demand in China is seen as a key driver of global demand growth in the second half of this year with potential for a market deficit.
• Supplies from Saudi and Russia are showing signs of the pledge supply cuts while Kazakhstan’s daily oil production dipped on July 23 and Nigeria’s Forcados oil terminal is undergoing repair work due to a leak at the facility.
  • Brent SEP 23-OCT 23 up 0.01$/bbl at 0.27$/bbl
  • Brent DEC 23-DEC 24 up 0.1$/bbl at 4.38$/bbl
• Crude time spreads are following the flat price move higher on the prospect of tightening supplies with the prompt WTI spread again trading at the highest since November and Dec23-Dec24 the highest since April.
• Gasoline markets extended a recent rally with the front month cracks at the highest since July 2022. Prices were supported yesterday on a report that Exxon’s Baton Rouge refinery may have to keep a FCC unit down for 2-3 weeks of unplanned repairs. Diesel spreads eased back late yesterday following a surge higher earlier in the day amid ongoing supply concerns and low inventories.
  • US gasoline crack down -0.2$/bbl at 40.5$/bbl
  • US ULSD crack up 0.4$/bbl at 37.86$/bbl