OIL: Crude Holds in Range with Tighter Q3 Set Against Demand Concern

The front month Brent has been bouncing between $81.76/bbl and $83.34/bbl since June 11 with tighter supply expectations in Q3 set against demand concerns. The price has reversed the sharp bearish decline in reaction to the OPEC output plans announced at the start of the month.

• Industry reports this week continue to convey differing demand forecasts with the IEA 2024 growth forecast now 1.29mb/d below the OPEC estimations. China remains a key unknown with focus on slowing China refining demand in a further sign that China commodity demand is cooling, according to Bloomberg.
• Firmer USD levels are helping to limit oil gains with Fed officials now seeing only one interest rate cut this year. Broader risk sentiment has been slightly softer with on-going political uncertainty in the EU a clear headwind for assets in that region.
  • Brent AUG 24 down 0.6% at 82.25$/bbl
  • WTI JUL 24 down 0.8% at 78.03$/bbl
  • Brent AUG 24-SEP 24 down 0.04$/bbl at 0.41$/bbl
  • Brent DEC 24-DEC 25 down 0.19$/bbl at 3.97$/bbl
• Russia saw further drone strikes overnight with an attack on an oil refinery in Voronezh Oblast. The impact of the strike is under investigation.
• Attacks on shipping by the Houthi rebels in Yemen also appear to have picked up in recent days.
• Diesel cracks have risen to their highest level since May 23, accelerating the recovery seen since the start of June with better than expected US PPI data adding further support yesterday.
  • US gasoline crack up 0.2$/bbl at 23.49$/bbl
  • US ULSD crack down 0$/bbl at 26.42$/bbl