OIL: Crude Edges Higher With Focus on Demand and Geopolitical Risks

Crude is showing no clear direction over the last week although edged slightly higher yesterday ahead of the Brent August future contract expiry today.  Geopolitical risks including conflict in the Middle East and Russian energy infrastructure strikes are supportive while the market looks for indications of future demand from updated data in the US and China.  

• China official PMI prints for June are expected on Sunday with manufacturing expected unchanged while US PCE data today will be a key focus point for the Fed outlook.
  • Brent SEP 24 up 0.5% at 85.72$/bbl
  • WTI AUG 24 up 0.6% at 82.27$/bbl
  • Brent SEP 24-OCT 24 unchanged at 0.82$/bbl
  • Brent DEC 24-DEC 25 up 0.14$/bbl at 5.15$/bbl
• Politico reported on Thursday that, according to US officials, a "large-scale" confrontation between Israel and Hezbollah is likely to break out, "in the next several weeks" if Israel and Hamas fail to reach a cease-fire deal for Gaza.
• A fire broke out at a fuel depot and has been contained in Russia’s Tambov region following another drone attack overnight, according to regional Governor Maksim Yegorov. Russian defence ministry said 25 Ukrainian drone were intercepted overnight.
• Shandong’s 400k b/d Yulong refinery could be nearing a start with the refiner buying ESPO crude for late July arrival taking total spot purchases to about 3mbbls.
• Diesel and gasoline cracks are edging higher today after a pull back yesterday while uncertainty surrounds US demand ahead of a potential boost from the July 4 holiday period.
  • US gasoline crack up 0.3$/bbl at 24.71$/bbl
  • US ULSD crack up 0.2$/bbl at 26.06$/bbl