Crude Softer Monday but Remains Near Recent Highs

Oil prices are dipping slightly Monday but remain near three-month highs after last week’s latest extension on signs of further tightening in the market as OPEC+ cuts gain further traction.

• Oil bulls are optimistic that Saudi voluntary cuts of 1mn bpd may be extended for a further month in September, supported by the latest Bloomberg survey and Goldman Sachs note. The extended cut currently runs for July/August.
• Brent SEP 23 down -0.5% at 84.57$/bbl
• WTI SEP 23 down -0.2% at 80.43$/bbl
• Gasoil AUG 23 up 0% at 874.25$/mt
• WTI-Brent down -0.04$/bbl at -4.28$/bbl
• "Oil prices are up 18% since mid-June as record high demand and Saudi supply cuts have brought back deficits, and as the market has abandoned its growth pessimism," Goldman Sachs analysts said in a July 30 note.
• The potential end to US Fed rate hikes also supported market strength last week – prompting Brent and WTI to their highest settlement since April.
• The Chinese demand backdrop remains patchy but optimism around economic stimulus last weeks remains supportive. Peak summer demand is driving higher gasoline and jet fuel demand.
• Brent SEP 23-OCT 23 down -0.07$/bbl at 0.51$/bbl
• Brent DEC 23-DEC 24 down -0.02$/bbl at 4.66$/bbl
• Russia has already started to reduce exports in July and intends to meet pledged exports cuts in August according to Russian officials and supported by vessel tracking data.
• Exxon Mobil's CEO Darren Woods said the company expects record oil demand this year and next year, and that this may help boost energy prices in the second half of the year.
• The September Brent contract will expire later on Monday.
• Data last week showed US distillate stocks 14.5% below the five-year average, Singapore Middle Distillates inventories 32.7% below average and European ARA Gasoil stocks are 11.8% below. US gasoline stocks are about 7.4% below the five-year average while European ARA gasoline stocks are 18.1% above normal.
• Front month US gasoline last week reached the highest since Oct 2022 with the gasoline crack spread holding onto most of the gains seen this month. Oil product markets have been supported by recent refinery issues and ongoing low stocks. Options for European resupply look increasingly difficult from September onwards according to Sparta Commodities as Europe rely on shipments from the USGC.
• US gasoline crack down -0.1$/bbl at 40.36$/bbl
• US ULSD crack down -0.2$/bbl at 43.26$/bbl