OIL: Crude Halts Decline Ahead of Expected US Crude Stocks Draw

Crude markets have recovered slightly after front month Brent fell to the lowest since June 10 yesterday at $80.51/bbl.

• Prompt spreads suggest a tight near term market with the last three weeks showing a sharp drawdown in crude inventory in the US to add to geopolitical and weather-related supply risks.
• API showed US crude inventories fell further by 3.86mbbl last week, according to Bloomberg while gasoline fell 2.77mbbl and distillate 1.5mbbl. The official EIA data is released later today.
• The recent bearish focus is driven by the concern for oil demand in China and more OPEC+ supply from Q4 which could shift the market towards a surplus.
• Alberta’s out-of-control wildfires are supportive and have forced some producers to curtail production and evacuate staff. Around 170 wildfires are threatening supply of around 388kb/d according to government data.
• Diesel and gasoline crack spreads have found some support this week after the bearish trend through July amid muted summer demand.
• Russia will reinstate its gasoline export ban in August and could extend into Sep-Oct while the government may consider a diesel export ban if fuel prices grow sharply, according to Kommersant.
  • Brent SEP 24 up 0.5% at 81.4$/bbl
  • WTI SEP 24 up 0.5% at 77.36$/bbl
  • Brent SEP 24-OCT 24 down 0.01$/bbl at 0.93$/bbl
  • Brent DEC 24-DEC 25 up 0.07$/bbl at 4.01$/bbl
  • US gasoline crack down 0.1$/bbl at 23.12$/bbl
  • US ULSD crack up 0$/bbl at 25.11$/bbl