Mid-Day Oil Summary: Crude Rebounds

Crude markets are rebounding today as tighter OPEC+ supplies and signs of lower global oil inventories are weighed against lackluster stimulus measures in China and potential Fed rate hikes in the US.

• Brent OCT 23 up 0.8% at 85.08$/bbl
• WTI OCT 23 up 0.8% at 80.73$/bbl
• Gasoil SEP 23 down -1.1% at 936.5$/mt
• The Chinese demand recovery has a weaker outlook for the remainder of this year by Chinese refiners. China’s biggest refiner, Sinopec, said Monday that the country’s product demand in the second half would expand at a slower pace than in the first.
• Investors await key US economic data releases later this week that will help determine the path of interest rates this year. This week the focus will be on the US personal consumption expenditures price index report and the August nonfarm payrolls data.
• Crude inventories in the US Strategic Petroleum Reserve rose by 600kbbl last week.
• Russia’s seaborne crude shipments in the week to Aug. 27 jumped to their highest in two months. Total crude shipments totalled 3.4m b/d, up 0.88m b/d.
• Crude processing at Mexican state oil company Pemex's domestic refineries fell in July to 768,732 bpd in July – well below its 1mn bpd target.
• The CPC oil pipeline held scheduled maintenance at the section linking to Kazakhstan’s Tengiz field August 21-24.
• Saudi Aramco may increase the OSP of its Arab Light crude by 30c/bbl for October sales to Asia according to a Bloomberg survey.
• US cracks have fallen back this week after surging Friday on Garyville fire news. Marathon informed the markets that the refinery was operating at reduced rates Monday but Marathon is preparing to restart units at the 596kbpd refinery.
• US gasoline crack down -0.6$/bbl at 26.98$/bbl
• US ULSD crack up 0.2$/bbl at 52.7$/bbl
• Kuwait’s Al Zour refinery has issued a fuel oil sales tender - the first time in more than two months. The tender is offering LSFO with a maximum sulphur content of 0.5% for September-loading.
• China is planning to increase refined oil products exports to 3.53mn tons next months, up by 9.3% from the planned August levels.