Crude Up Moderately In August, Hurricane Not Yet Impacting Output

Oil prices rose moderately on Wednesday as US data showed a large stock drawdown and the dollar weakened (USD index -0.4%) following softer-than-expected US data. Crude looks set to finish August slightly higher thanks to this week’s moves.

• WTI rose 0.7% on Wednesday to $81.71/bbl and is currently 2.4% higher this week and up 0.5% on the month. It is currently slightly lower at $81.63. It held above $80 and breached $82 briefly to make a high of $82.05. It broke resistance at $81.75 which has opened up the bull trigger at $84.16, August 10 high.
• Brent rose 0.4% to $85.28/bbl and traded most of the day above $85. It reached a high of $85.68. It is up 1.6% this week and August is now 0.4% higher. Barclays revised up its 2024 forecast to $97 from $89, as it expects the market to tighten further.
• There has so far been little impact on oil and gas production in the Gulf of Mexico from Hurricane Idalia.
• Russian Deputy PM Novak has said that exports will be cut 300kbd in September compared with June. But Bloomberg is reporting that Russian seaborne crude shipments may have reached their highest in 8 weeks recently.
• US EIA crude inventories fell 10.58mn barrels which was in line with the API data. They are now at their lowest level since December 2022. Distillate stocks rose 1.24mn and gasoline fell 0.21mn. Four-week implied gasoline demand rose for the first time in three weeks. Refinery utilisation was down 1.2% last week to 93.3% due to outages and maintenance.