Crude Just Positive After  High Volatility Yesterday

Crude edged higher this morning after a day of high volatility yesterday as Brent bounced between 93 and 97$/bbl.

• Economic demand concerns, risk aversion and stronger dollar all initially fed into lower oil prices. Levels then recovered later in the day with Saudi Arabia indicating that OPEC+ may need to cut production to stabilize the volatile market. The group next meet on Sep 5.
  • Brent OCT 22 up 0.4% at 96.82$/bbl
  • WTI OCT 22 up 0.4% at 90.73$/bbl
  • Gasoil SEP 22 up 1.3% at 1110.5$/mt
  • WTI-Brent up 0.09$/bbl at -6.06$/bbl
• No further progress has been made in agreeing a nuclear deal and the US had yet to formally respond to Iran’s comments on the draft text. Iran suggest they would be able to increase output quickly and that production capacity will be 4mbpd by Mar23 compared to current production of about 2.6mbpd.
  • Brent OCT 22-NOV 22 down -0.01$/bbl at 0.66$/bbl
  • Brent DEC 22-DEC 23 down -0.06$/bbl at 7.87$/bbl
• The Saudi comments caused a small correction in time spreads with curve backwardation strengthen slightly. The prompt Brent spread bounced off the lowest this year at just 0.4$/bbl.
  • US 321 crack down -6$/bbl at 36.64$/bbl
  • US gasoline crack down -8.5$/bbl at 21.86$/bbl
  • US ULSD crack down -1.2$/bbl at 66.21$/bbl
• Gasoline cracks followed the initial crude move lower on the back of oil demand concerns but diesel maintained strength. Tight supply is supporting diesel prices with ongoing limited refining capacity and no significant build in stock levels despite high refinery runs