Crude Steadies After Macro Driven Pullback Yesterday

Crude has stabilised after seeing a 1.7$/bbl decline yesterday driven by economic demand concerns and with a stronger US dollar. The move came despite a record decline in US crude inventories according to the weekly EIA data.

• Brent OCT 23 down -0.1% at 83.1$/bbl
• WTI SEP 23 down -0.1% at 79.41$/bbl
• Gasoil AUG 23 up 1.1% at 894.25$/mt
• WTI-Brent up 0.05$/bbl at -4.06$/bbl
• Renewed upside pressure could come from Saudi Arabia with an announcement on potential extended production cuts in September and higher OSPs to Asia possible this week. The OPEC JMMC meet on Friday to review the impact of production cuts but is not expected to make any recommendations to change overall policy.
• EIA crude oil inventories fell just over 17.05mbbls in the week ending 28 Jul with a rise in crude exports back above 5mbpd and big correction in the oil adjustment (unaccounted oil) figure and despite a drop in refinery utilisation and increased imports.
  • Brent OCT 23-NOV 23 unchanged at 0.39$/bbl
  • Brent DEC 23-DEC 24 down -0.06$/bbl at 4.52$/bbl
• The tighter market supply and potential deficit this year have driven stronger curve backwardation over the last month, but the time spreads followed the pull back yesterday. The Dec23-Dec24 spreads reversed the previous gains from this week after reaching the highest since April.
• Diesel and gasoline crack spreads softened following EIA US inventory data before diesel regained ground late in the day amid ongoing tight supplies and with US inventories falling further below normal this week.
  • US gasoline crack down 0$/bbl at 36.97$/bbl
  • US ULSD crack up 0.2$/bbl at 47.09$/bbl