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OIL: Crude Continues Lower Amid Market Oversupply Risks

OIL
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Crude continues to edge lower after a sharp drop yesterday taking Brent front month to the lowest since December amid market oversupply risks. Weak demand in China and non-OPEC supply growth are adding to the possible return of OPEC+ voluntary cuts gradually from Oct to potentially push the market balance into a surplus. The group has previously stressed flexibility and if prices remain around these levels, then there will likely be pressure to delay the unwinding of its output cuts.

  • Libya’s central bank believes that an agreement can be reached soon that will allow the country’s oil output to resume to normal levels after a political dispute cut it sharply. An agreement could return 500kbpd of supply, Bloomberg said.
  • A net decline in US crude inventories since late June has added some price support and another draw of 0.6mbbl is expected this week according to a preliminary Reuters survey ahead of the delayed API data today and EIA data tomorrow.
  • Friday’s US payrolls will be a focus for crude markets as they await Fed easing to support demand.
  • Diesel cracks found some support yesterday amid the fall in underlying crude, but gasoline cracks fell further as the end of the driving season weighs on demand. U.S. retail gasoline demand saw a fall of 0.2% for the week ending August 31 w/w according to GasBuddy.
    • Brent NOV 24 down 0.4% at 73.47$/bbl
    • WTI OCT 24 down 0.4% at 70.03$/bbl
    • Brent NOV 24-DEC 24 down 0.01$/bbl at 0.44$/bbl
    • Brent DEC 24-DEC 25 down 0.13$/bbl at 2.19$/bbl
    • US gasoline crack down 0.1$/bbl at 12.85$/bbl
    • US ULSD crack down 0.2$/bbl at 22.24$/bbl
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Crude continues to edge lower after a sharp drop yesterday taking Brent front month to the lowest since December amid market oversupply risks. Weak demand in China and non-OPEC supply growth are adding to the possible return of OPEC+ voluntary cuts gradually from Oct to potentially push the market balance into a surplus. The group has previously stressed flexibility and if prices remain around these levels, then there will likely be pressure to delay the unwinding of its output cuts.

  • Libya’s central bank believes that an agreement can be reached soon that will allow the country’s oil output to resume to normal levels after a political dispute cut it sharply. An agreement could return 500kbpd of supply, Bloomberg said.
  • A net decline in US crude inventories since late June has added some price support and another draw of 0.6mbbl is expected this week according to a preliminary Reuters survey ahead of the delayed API data today and EIA data tomorrow.
  • Friday’s US payrolls will be a focus for crude markets as they await Fed easing to support demand.
  • Diesel cracks found some support yesterday amid the fall in underlying crude, but gasoline cracks fell further as the end of the driving season weighs on demand. U.S. retail gasoline demand saw a fall of 0.2% for the week ending August 31 w/w according to GasBuddy.
    • Brent NOV 24 down 0.4% at 73.47$/bbl
    • WTI OCT 24 down 0.4% at 70.03$/bbl
    • Brent NOV 24-DEC 24 down 0.01$/bbl at 0.44$/bbl
    • Brent DEC 24-DEC 25 down 0.13$/bbl at 2.19$/bbl
    • US gasoline crack down 0.1$/bbl at 12.85$/bbl
    • US ULSD crack down 0.2$/bbl at 22.24$/bbl