Crude Ticks Higher Amid Demand Optimism

Crude prices are ticking higher after trading through the top of the recent range yesterday to the highest since late April at $86.91/bbl. Crude continues to be supported by geopolitical uncertainties, demand optimism and the early start of the hurricane season in the Atlantic.

• Curve backwardation has also resumed gains reflecting the tight market balance expected this quarter before OPEC+ start to return some supply from October. The demand outlook remains uncertain with China’s Caixin manufacturing PMI more optimistic than the official PMI while the market looks for signs of a possible US interest rate cut in September that could boost oil demand growth.
  • Brent SEP 24 up 0.2% at 86.8$/bbl
  • WTI AUG 24 up 0.1% at 83.49$/bbl
  • Brent SEP 24-OCT 24 up 0.03$/bbl at 0.91$/bbl
  • Brent DEC 24-DEC 25 up 0.09$/bbl at 5.41$/bbl
• OPEC’s crude production was steady for the third month at 26.98mb/d in June, while some members continued to exceed their quotas, according to Bloomberg.
• Hurricane Beryl has become the earliest ever category 5 in the Atlantic as it moves towards Jamaica and across the Caribbean Sea later this week. The current path heads to the Yucatan Peninsula and southwestern Gulf of Mexico.
• Diesel and gasoline cracks are climbing amid expectations of improving US demand ahead of the July 4 holiday period with TSA and AAA forecasting record levels of travel.
  • US gasoline crack up 0.2$/bbl at 24.87$/bbl
  • US ULSD crack up 0.2$/bbl at 26.5$/bbl