Demand Concerns Drive Crude Lower

Crude drifting lower as demand concerns and a stronger dollar weigh on the market despite another crude draw in EIA data yesterday. Demand concerns for central bank tightening have taken over from the supply risks this week bringing Brent down 10$/bbl from 105$/bbl.

• Brent NOV 22 down -0.7% at 94.93$/bbl
• WTI OCT 22 down -0.8% at 88.8$/bbl
• Gasoil SEP 22 down -1.4% at 1082.75$/mt
• WTI-Brent up 0.95$/bbl at -6.61$/bbl
• The upcoming OPEC meeting on Sep 5 continues to add uncertainty after Saudi Arabia last week suggested measures could be taken to reconnect the physical and futures markets. Late yesterday OPEC+ reports suggested a tighter market outlook with members underproducing relative to targets. They projected a lower surplus of 400kbpd this year and switched to a deficit of 300kbpd for next year.
  • Brent NOV 22-DEC 22 up 0.01$/bbl at 1.44$/bbl
  • Brent DEC 22-DEC 23 up 0.08$/bbl at 9.36$/bbl
• Brent time spreads are stable today after seeing volatility this week due to uncertainty over Iraq oil production. State marketer SOMO dismissed concerns for supply after political disruptions earlier in the week.
  • US 321 crack down -0.6$/bbl at 29.06$/bbl
  • US gasoline crack down -0.7$/bbl at 11.88$/bbl
  • US ULSD crack down -0.5$/bbl at 63.19$/bbl
• Weak implied demand data form EIA for both gasoline and diesel pushed margins lower with the trend continuing this morning. Data showed little signs of a recovery in gasoline demand and diesel dipped having been more robust throughout the summer so far.