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Crude Holding Gains With Weaker USD and Possible Extended Saudi Cut

OIL

The September Brent crude futures are holding around 75$/bbl supported by a weaker US dollar and after a possible sign of tighter supplies with a drop in US crude stocks this week and possible Saudi cut extension.

  • The expected extension of Saudi Arabia production cuts beyond July into August would be supportive although is largely priced into market expectations. The market will be looking for indications of the future production levels when Energy Minster Prince Abdulaziz bin Salman addresses an industry conference on 5-6 July next week.
  • The Brent Aug-Sep spread continues to rally ahead of the August contract expiry today while the remaining curve backwardation is also strengthening slightly.
    • Brent SEP 23 up 0.7% at 75.06$/bbl
    • WTI AUG 23 up 0.7% at 70.36$/bbl
    • Brent SEP 23-OCT 23 up 0.1$/bbl at 0.13$/bbl
    • Brent DEC 23-DEC 24 up 0.14$/bbl at 2.68$/bbl
    • WTI AUG 23-SEP 23 up 0.04$/bbl at -0.12$/bbl
    • WTI DEC 23-DEC 24 up 0.16$/bbl at 2.95$/bbl

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