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Crude Up From Intraday Low Amid China Uncertainty and Forcados Resumption

OIL

Crude fell back to new lows of the day at 85.58$/bbl before finding some support amid concern for weaker demand in China and a worsening property sector ahead of data tomorrow.

  • The downside pressure has been assisted by a stronger US dollar, strong Iranian crude production and the resumption of crude exports from the Nigerian Forcados terminal. Exports from the port were suspended for around a month because of a leak.
  • Iran's crude production is now just short of 3.2mbpd a new high since the US reimposed sanctions in the second half of 2018. Production is due to rise to 3.3mbpd before the end of August according to Iraq’s oil minister Javad Owji.
  • Crude curve backwardation is also softer on the day although near term spreads are holding up stronger amid tight supply concerns due to the extended Saudi and Russia supply cuts.
    • Brent OCT 23 down -0.9% at 86.07$/bbl
    • WTI SEP 23 down -1% at 82.37$/bbl
    • WTI-Brent down -0.14$/bbl at -4.31$/bbl
    • Brent OCT 23-NOV 23 unchanged at 0.67$/bbl
    • Brent DEC 23-DEC 24 down -0.24$/bbl at 4.94$/bbl

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