Mid-Day Oil Summary: Crude Slides

Crude markets face downward pressure Wednesday as economic weakness out of the US and China combined with high flows out of Iran and optimism around a return of Iraqi flows via Turkey.

• Brent OCT 23 down -1.5% at 82.78$/bbl
• WTI OCT 23 down -1.5% at 78.41$/bbl
• Gasoil SEP 23 down -1.3% at 902.75$/mt
• The uptrend in WTI futures remains intact and short-term weakness appears to be a correction. Firm support to watch is unchanged at $78.33, the Aug 3 low. A clear breach of this level would signal scope for a deeper retracement. For bulls, a resumption of gains would refocus attention on the next objective at $85.24,the 1.236 projection of the Jun 28 - Jul 13 - Jul 17 price swing. Moving average studies are in bull-mode condition that continues to highlight an uptrend.
• API weekly oil stock data from late yesterday: Crude -2.4mbbl, Cushing -2.1mbbl, Gasoline +1.9mbbl, Distillate -0.153mbbl
• Crude inventories in the European ARA region rose 905k bbl in week ending 18 August, or 1.5%, to 62.8m bbl, Genscape data show. Inventory levels have risen above the previous five-year range.
• The EIA weekly petroleum inventory data is due for release this afternoon at 15:30BST. EIA data is expected to show a draw in crude stocks with a small draw in gasoline and small build in distillates according to a Bloomberg survey. Refinery utilisation is expected to show another small gain.
• Iraq has not reached an agreement with Turkey to allow an immediate resumption of oil exports via the Turkish port of Ceyhan. Turkish and Iraqi energy ministers today emphasized the importance of resuming oil flow after repairs.
• US gasoline prices have eased back in recent days to the lowest in two weeks with limited disruption despite extreme heat on the US Gulf Coast and a West Coast hurricane. Diesel margins remain strong with concern for low distillates supplies before the peak winter consumption.
• US gasoline crack down -8.2$/bbl at 27.8$/bbl
• US ULSD crack down -0.5$/bbl at 51.07$/bbl
• Pump prices in the US are approaching the highest seasonal level in data back to 2008 with regular gasoline now at an average of $3.854/gal according to AAA. The impact of rising gasoline prices on inflation are a concern for the US and a potential extension to the Fed rate tightening cycle.
• MNI COMMODITY ANALYSIS: Sanctioned Barrels Cloud 2023 Oil Balances: https://enews.marketnews.com/ct/x/pjJscQGKnuUI6ahgchB_TA~k1zZ8KXr-kA8x6nGWJ-tptIPjO1OcQ