OIL: Crude Edges Higher Amid US Crude Stocks Draw in API Data

Crude front month is edging higher with support from an industry-reported large US crude inventory drawdown. Brent remains below a high of $87.46 yesterday after a rally over the last month with the market focus on upside risks from tight supply and potential higher summer fuel demand along with geopolitical and hurricane risks.

• US crude inventories fell 9.2mbbl, according to people familiar with the API data compared to expectation of a 0.1mbbls draw according to Bloomberg. The official EIA figures are released later today.
• Concerned that Fed easing will be delayed further and weigh on fuel demand is limiting upside and at the same time the driving season is being monitored closely. TSA and AAA are forecasting record levels of travel in the US over the July 4 holiday period.
• OPEC oil output rose 70kb/d in June, according to a Reuters survey, as an increase in supply from Nigeria and Iran offset voluntary supply cuts by other members and the wider OPEC+ group.
  • Brent SEP 24 up 0.5% at 86.67$/bbl
  • WTI AUG 24 up 0.5% at 83.2$/bbl
  • Brent SEP 24-OCT 24 up 0.04$/bbl at 0.84$/bbl
  • Brent DEC 24-DEC 25 up 0.15$/bbl at 5.29$/bbl
• Diesel and gasoline cracks are continuing to climb with diesel yesterday up to the highest since early April.
• The US DOE said July 2 that it has completed awarding contract for the sale of 1mbbl of gasoline from the US managed stockpile in northeastern states, Reuters said.
  • US gasoline crack down 0.1$/bbl at 24.98$/bbl
  • US ULSD crack down 0.2$/bbl at 27.34$/bbl