Mid-Day Summary Oil: Crude Edges Higher

Crude is edging higher as the market is weighing tighter supply from OPEC+ against softer economic data from China and recent strength in the US Dollar that added downside pressure on crude with US concern for inflation still supporting the risk of further Fed tightening.

• Brent OCT 23 up 0.9% at 84.18$/bbl
• WTI SEP 23 up 0.8% at 80.04$/bbl
• WTI OCT 23 up 0.9% at 79.74$/bbl
• The September23 WTI options expire against the 19:30BST futures close price today with significant open positions just above the current market price at the 80$/bbl strike price.
• Citigroup analysts expect oil supplies to be far more robust this year and next than is largely expected in its latest client note.
• DNO has partly restarted production at its Tawke field in the Iraqi Kurdistan region last month.
• Crude exports out of Kuwait dropped by over 400kbpd in July vs the 2022 average. The crude is largely being redirected domestically towards the al-Zour refinery.
• Angola is scheduled to export 1.21mbpd of crude oil in October, the highest level since June 2021 on a daily basis, if not revised, according to a preliminary schedule.
• The CDU capacity utilizations of China's refineries hit a two-year high in early August with an average of 73.65% according to OilChem.
• Diesel cracks and Gasoil time spreads are seeing support today with US and European front month spreads regaining the small losses seen earlier this week. Low global inventories are supporting spreads with supplies tight ahead of the winter season.
• EIA weekly petroleum data yesterday showed a drop in distillates output and a small increase in total US stocks doing little to boost the low inventories levels. Distillates implied demand was lower on the week but the four week average was little changed. The data showed US distillate stocks nearly 16.7% below the five year average.
• Singapore Middle Distillates inventories saw the first increase in five weeks but are still 29% below the five year average. European ARA Gasoil stocks were last week 11.5% below normal with the updated data due out later today.
• Gasoil SEP 23 up 2.1% at 901$/mt
• Gasoil SEP 23-OCT 23 up 4$/mt at 14.25$/mt
• Gasoil DEC 23-DEC 24 up 7.25$/mt at 78.75$/mt
• US ULSD crack up 1.5$/bbl at 49.26$/bbl
• EU Gasoil-Brent up 1.6$/bbl at 34.83$/bbl