Crude Steadies After Recovery on Saudi and Russia Cuts Yesterday

Crude holds steady ahead of the JMMC meeting and US nonfarm payrolls report after rallying yesterday in response to the largely expected Saudi and Russia cut extensions into September. Brent yesterday regained all the losses seen earlier in the week driven by US economic demand growth concerns and from a stronger US dollar.

• Brent OCT 23 up 0% at 85.17$/bbl
• WTI SEP 23 up 0.1% at 81.65$/bbl
• Gasoil AUG 23 up 1.3% at 910.75$/mt
• WTI-Brent down -0.02$/bbl at -4.02$/bbl
• Saudi Arabia will extend its 1mbpd voluntary production cut until end-September, while leaving the door open to “extend” and/or “deepen” them. Russia’s will cut oil exports by 300kbpd in September, down from the pledged 500kbbd in August.
• The OPEC JMMC meeting takes place today at 2pm Vienna time to review the impact of production cuts but is not expected to make any recommendations to change overall policy.
• CPC said Russia temporarily closed the Novorossiysk Port for marine traffic after a drone attack however oil loadings for moored tankers continues and no damage to key infrastructure was reported.
  • Brent OCT 23-NOV 23 up 0.02$/bbl at 0.47$/bbl
  • Brent DEC 23-DEC 24 up 0.07$/bbl at 4.99$/bbl
• Crude time spreads also regain ground yesterday amid tighter market supply and potential deficit this year bringing curve backwardation back towards the strongest since April. The prompt WTI spread is back up to the highest seen since November.
• Diesel and gasoline crack spreads softened early in the day yesterday with gasoline spreads back to the levels seen in mid July amid weak demand concerns. Diesel spreads however regained ground late in the day to the highest since early Feb amid ongoing tight supplies with US inventories falling further below normal this week.
  • US gasoline crack up 0.3$/bbl at 35.37$/bbl
  • US ULSD crack down -0.2$/bbl at 47.79$/bbl