END OF DAY OIL SUMMARY: Crude Extends Gains

Crude is resuming its weekly gains supported by a lower US Dollar and yesterday’s announcement of Saudi and Russian cut extensions into September.

• Brent OCT 23 up 0.9% at 85.92$/bbl
• WTI SEP 23 up 1% at 82.37$/bbl
• OPEC’s JMMC recommended no change to the group’s current output policy during today’s meeting. Crude prices showed little reaction to the headlines as no change to policy was widely expected by the market.
• Crude received some support before easing back from the lower US dollar following the updates US nonfarm payrolls data.
• Russia is fully adherent to the OPEC+ deal to reduce output by 500kbpd, while the country has exceeded cuts of 500kbpd in June, Russian Deputy PM Alexander Novak said.
• Along with the rally in Brent on tightening supplies, key physical crude market indicators in Asia have also strengthened further after Saudi Arabia and Russia extended voluntary supply cuts.
• Crude backwardation has seen a gradual strengthening since late June amid tighter supplies as Saudi have extended the voluntary cuts initial from July into August and now again into September. The prompt WTI spread is back up to the highest seen since November while most other spreads are at or near the highest since April.
• Brent OCT 23-NOV 23 up 0.01$/bbl at 0.46$/bbl
• Brent DEC 23-DEC 24 up 0.17$/bbl at 5.09$/bbl
• WTI SEP 23-OCT 23 up 0.02$/bbl at 0.49$/bbl
• WTI DEC 23-DEC 24 up 0.19$/bbl at 5.61$/bbl
• Russian authorities lifted marine traffic halt in Novorossiysk port in the Black Sea at 10:39am Moscow time, after authorities temporarily closed the port after a drone attack.
• Rising crude oil exports from the US are exerting downward pressure on European and Asian oil prices, acting as a counterbalance against production cuts and embargoes on Russian oil.
• Total late yesterday reported disruption in a unit at Normandy Complex in France. The firm has also stopped the Unit 825 at its Port Arthur refining/petchem complex on Thursday after a leak at a pump. BP has moved a planned September turnaround at its 435kbpd Whiting, Indiana, refinery to August.
• Global crude/condensate imports recovered on a m-o-m basis in July, reinforcing the view that global crude supply and demand balances will tighten over H2.
• Global oil demand is set to grow by 2.4m b/d in 2023 according to Russian Deputy Prime Minister Alexander Novak.