Crude Steady Today But Set for Net Gain on the Week

Crude is steady and set for another net gain on the week after seeing prices swing between about 83$/bbl and 84.5$/bbl yesterday. Oil markets are supported by OPEC+ output cuts and improving economic expectations. US yesterday saw solid GDP growth to add to speculation for a slowing US Fed tightening cycle while potential stimulus measures in China are also supportive.

• Brent SEP 23 down -0.3% at 83.97$/bbl
• WTI SEP 23 down -0.2% at 79.89$/bbl
• Gasoil AUG 23 up 0.1% at 855$/mt
• WTI-Brent down -0.05$/bbl at -4.08$/bbl
• Russia has already started to reduce exports in July and intents to meet pledged exports cuts in August according to Energy Minister Shulginov. This follows from ship tracking data earlier this week showing seaborne crude flows from Baltic and Black Sea ports slumped to the lowest in seven months according to Bloomberg.
• IEF, Standard Chartered and UBS are all seeing a tightening deficit due to OPEC+ supply cuts supporting crude in the coming months amid a decline in crude in storage.
  • Brent SEP 23-OCT 23 down -0.02$/bbl at 0.43$/bbl
  • Brent DEC 23-DEC 24 down -0.1$/bbl at 4.52$/bbl
• Crude backwardation is maintaining recent strength reflecting the tighter market supply with the higher WTI prompt spread supported by a steady decline in Cushing stocks in the last month. Dec23-Dec24 spreads are holding just below the highest since April seen earlier this week.
  • US gasoline crack down -0.6$/bbl at 40.36$/bbl
  • US ULSD crack down -0.5$/bbl at 41.44$/bbl
• Front month US gasoline yesterday reached the highest since Oct 2022 with the gasoline crack spread holding onto 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.