OIL: Crude Holding Steady with Focus Still on Middle East Risks

Crude is holding gains following a rally earlier this month to a high of $82.4/bbl on upside market risks from Middle East tensions as concern over a potential attack on Israel by Iran intensifies. Soft China refining data and weaker global demand expectations are limiting upside moves.

• Talks on reaching a hostages-for-ceasefire agreement with Hamas involving a high-level Israeli delegation, and mediators from the US, Egypt and Qatar started in Doha yesterday. Hamas will not participate directly in the talks.
• California Governor Gavin Newsom plans to propose legislation forcing oil companies in the Golden State to build stockpiles of gasoline and other fuels to prevent supply shortages and price spikes during refinery maintenance and outages, Bloomberg said.
• Near term Brent crude backwardation remains fairly strong with the prompt spread at $0.86/bbl suggesting tight supplies despite the relatively muted summer fuel demand.
• USGC diesel flows to Europe are on track to hit a new record monthly high in Aug, exceeding those in July, Platts said.
• US gasoline cracks rallied slightly yesterday after reaching the lowest since February at around $12.67/bbl while diesel cracks drifted down towards the lows from earlier this week.
  • Brent OCT 24 down 0.3% at 80.77$/bbl
  • WTI SEP 24 down 0.5% at 77.77$/bbl
  • Brent OCT 24-NOV 24 down 0.01$/bbl at 0.86$/bbl
  • Brent DEC 24-DEC 25 down 0.1$/bbl at 3.78$/bbl
  • US gasoline crack up 0.1$/bbl at 20.98$/bbl
  • US ULSD crack up 0$/bbl at 21.75$/bbl