Mid-Day Oil Summary: Crude Edges Lower

Crude prices edged lower in the late morning as an uncertain global demand outlook after weaker than expected stimulus measures in China are weighed against tighter supplies amid OPEC+ cuts.

• Brent OCT 23 down -0.5% at 84.05$/bbl
• WTI SEP 23 down -0.2% at 80.54$/bbl
• Gasoil SEP 23 down -1.3% at 902.75$/mt
• Iraq's oil minister is in the Turkish capital Ankara to discuss issues including the resumption of oil exports through the Ceyhan oil terminal.
• US seaborne crude exports in August are set to reach the highest since March to average about 4.2mb/d compared to 3.8mb/d in July.
• Norway’s oil and natural gas production recovered last month with oil output rising to the highest level in four months, NPD data show.
• China’s economic weakness is weighing on prices with an upside ceiling for crude of about 90$/bbl according to a report by Eurasia Group.
• Upside is limited by concern for inflation and the impact on a potential extension to the US rate tightening cycling as the market looks for August PMI data and the annual Jackson Hole symposium later this week.
• Crude backwardation softens amid global economic concerns from a faltering Chinese economy and inflation risks in the US and with signs of increased supplies from Iran to offset some of the other OPEC+ production cuts. Brent Dec23-Dec24 has fallen from the highest since April at just over 5.5$/bbl on 10 August back to 3.88$/bbl today. The prompt Brent spread has also pulled back from 0.74$/bbl to 0.31$/bbl suggested an easing of the near term tight supplies.
• US gasoline prices have eased back in recent days to the lowest in two weeks with limited disruption despite extreme heat on the US Gulf Coast and a West Coast hurricane. Front month US RBOB is down from a peak of 298.4c/gal on 11 Aug to 277.5c/gal with cracks spreads also following the move lower.
• The five refineries in Los Angeles with a combined crude-oil refining capacity of 1.1m b/d came through Hurricane Hilary unscathed.
• Valero Three Rivers refinery was yesterday preparing to restart its sole 25kb/d FCC after an unplanned shutdown on Sunday due to high temperatures. The refinery is running the unit hard to meet summer gasoline demand according to Bloomberg sources.
• TotalEnergies has been forced to halt one of two key FCC units at its 338kb/d Antwerp refinery about a week ago following a fault.
• European gasoline arrivals in the US slipped by 11% w/w to 344kb/d in the week to 17 Aug, according to bills of lading and ship-tracking data compiled by Bloomberg.
• RBOB SEP 23 down 0% at 2.77$/gal
• EU Gasoline-Brent up 0.1$/bbl at 25.23$/bbl
• US gasoline crack down -0.1$/bbl at 35.86$/bbl