OIL: Crude Drifting Lower Amid Soft China Demand wtih Focus on Middle East

Crude prices are drifting downwards but above the low from Friday as the market waits for the outcomes of further meetings in the Middle East. Continued lacklustre data from China have added to existing worries regarding crude demand.

• Gaza ceasefire talks continue with conflicting reports on progress towards an agreement as both Israel and Hamas blame each other for impeding a deal. Uncertainty over Iran’s response to the attack on Hamas’ political leader in Tehran also persists. There had been a lot of diplomatic pressure for it to hold until peace talks had concluded.
• China's gasoline exports fell 35.7% y/y in July and diesel exports fell 41% y/y to the lowest since June 2023, customs data showed, as refiners lowered crude runs amid weakening profit margins and soft domestic demand.
• Iran raised the Iranian Light crude OSP to Asia up $0.25/bbl in September to $2.35/bbl but prices for sales to Europe were lowered.
• Diesel and gasoline crack spreads have been drifting lower this month amid healthy global supply and tepid demand.
  • Brent OCT 24 down 0.5% at 79.29$/bbl
  • WTI SEP 24 down 0.7% at 76.14$/bbl
  • Brent OCT 24-NOV 24 down 0.02$/bbl at 0.79$/bbl
  • Brent DEC 24-DEC 25 down 0.19$/bbl at 3.34$/bbl
  • US gasoline crack down 0$/bbl at 20.45$/bbl
  • US ULSD crack down 0.2$/bbl at 21.17$/bbl