OIL: Crude Holds Recent Gains Ahead of OPEC and EIA Monthly Reports

Oil prices are holding onto most of the gains from a rally up to a high of $82.17/bbl yesterday ahead of the OPEC monthly oil report and EIA short term energy outlook both due out today. The IEA oil monthly report is scheduled for Wednesday.

• US inflation data and the outcome of the Federal Reserve's policy meeting tomorrow will also be important to assess the chance of future rates cuts and the impact on the US oil demand outlook. Fuel demand is expected to rise during the US driving season from the current low seasonal levels.
  • Brent AUG 24 up 0% at 81.66$/bbl
  • WTI JUL 24 up 0.1% at 77.81$/bbl
  • Brent AUG 24-SEP 24 up 0.02$/bbl at 0.42$/bbl
  • Brent DEC 24-DEC 25 down 0.04$/bbl at 3.86$/bbl
• Chinese refiners are set to receive lower volumes of Saudi crude for a third consecutive month in July despite lower official selling prices for the month.
• The potential for tighter supplies in Q3 is supporting prices after the bearish reaction to the OPEC meeting at the start of the month. OPEC members also have the flexibility to amend or pause the planned return of supply from Q4 if required.
• May production from OPEC members subject to targets fell by 110kb/d to 34.03mb/d according to Argus estimates, leaving the group still 110kb/d above target. Russia and Kazakhstan made progress towards meeting pledges but could fall further with a pledge to compensate for recent overproduction.
• Diesel and gasoline cracks edged down yesterday, as the surge in crude outpaced those of products. Diesel and gasoline markets remain well supplied globally while demand concerns remain.
  • US gasoline crack down 0.1$/bbl at 23.59$/bbl
  • US ULSD crack up 0.1$/bbl at 23.6$/bbl