Mid-Day Oil Summary: Crude Edges Higher

Oil edges higher Wednesday after US API data shows another substantial inventory drop while weaker US jobs markets bolsters expectations that the Fed will pause rates in the short term.

• Brent OCT 23 up 0.5% at 85.95$/bbl
• WTI OCT 23 up 0.6% at 81.68$/bbl
• Gasoil SEP 23 down -0.1% at 930$/mt
• WTI-Brent down -0.05$/bbl at -4.29$/bbl
• There have been concerns about Hurricane Idalia which has barreled through the rich oil and gas producing Gulf of Mexico but there has been limited production and supply impact so far.
• US stockpiles tumbled by 11.5 million barrels according to API data. If confirmed by EIA data later Wednesday - it would be the sixth drop in seven weeks.
• Crude inventories in ARA region fell 780k bbl in week ended August 25 to 62m bbl, down 1.2% from the week prior according to Genscape data.
• The latest EIA crude inventories data will be published today 10.30 ET (15.30 BST).
• Key timespreads show tightening conditions as Saudi led OPEC+ cuts tighten the market. This is despite signs of higher crude supply from Russia, after seaborne flows from the OPEC+ producer hit an eight-week high.
• Brent DEC 23-DEC 24 up 0.19$/bbl at 4.94$/bbl
• Kazakh crude and condensate production fell in August – a second consecutive month as power outages and maintenance at Tengiz hit production levels. Crude and condensate production was estimated at 7.07mn tons or 1.66mn bpd.
• Iran’s crude oil production is up again to 3.3mbpd, Oil Minister Javad Owji said, up by 700kbpd since the start of the year, according to Argus numbers.
• Oil supply is expected to remain tight as a Reuters survey of analysts expects Saudi Arabia will extend its voluntary output cut of 1mn bpd into October.
• Military officers in oil producing Gabon announced Aug. 30 that they had seized power following the electoral commission’s declaration that long-serving President Ali Bongo had won a third term.
• China’s diesel exports are estimated at around 1.1-1.2 million metric tons next month, according to Longzhong and JLC. Chinese refiners will have used up 98% of their fuel export quota by the end of August according to OilChem.
• In the US, gasoline demand is following its seasonal path lower supported by GasBuddy and OPIS figures. The later EIA report will give further sentiment. The last boost for US gasoline demand will come from the upcoming Labor Day weekend. The US has been pulling in higher gasoline flows from Europe to help support tight supplies – which are at a 14-week high.
• US gasoline crack up 0.2$/bbl at 26.05$/bbl
• US ULSD crack down -0.2$/bbl at 51.33$/bbl