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OIL: Crude Off Highs with Demand Concern Set Against Tighter Supply

OIL

Crude is drifting slightly lower after a rally yesterday to a Brent high of $87.39 after an unexpected large US crude inventory draw and with the partial evacuation of some oil platforms in the path of Hurricane Beryl.

  • Brent failed to break through the high of the week with upside limited by concern for US demand after weaker than forecast US employment and business data. Friday’s US payroll data is likely to be a focus as the market assess the possibility of Fed easing in September.
    • Brent SEP 24 down 0.6% at 86.78$/bbl
    • WTI AUG 24 down 0.7% at 83.27$/bbl
    • Brent SEP 24-OCT 24 unchanged at 0.82$/bbl
    • Brent DEC 24-DEC 25 down 0.14$/bbl at 5.32$/bbl
  • Hurricane Beryl could impact around 73kbd of federal offshore oil output, according to the National Hurricane Center and Ocean Energy Management data. The impact is not widespread at present across GOM producers, but Shell is shutting in production at its Perdido platform and BP is evacuating non-essential employees from a couple of platforms. 
  • The EIA weekly oil data showed a large crude stock draw driven by a recovery in crude exports and rebound in refinery runs. Refinery utilisation rebounded more than expected back up to 93.5%.
  • Traded volumes are likely to be light today due to the US holiday.
  • US gasoline cracks were trading modestly higher yesterday, supported by EIA data showing rising demand and a stock draw. However, diesel cracks have pulled back slightly after reaching the highest since early April on June 2.
    • US gasoline crack down 0.3$/bbl at 24.7$/bbl
    • US ULSD crack down 0.4$/bbl at 26.34$/bbl
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Crude is drifting slightly lower after a rally yesterday to a Brent high of $87.39 after an unexpected large US crude inventory draw and with the partial evacuation of some oil platforms in the path of Hurricane Beryl.

  • Brent failed to break through the high of the week with upside limited by concern for US demand after weaker than forecast US employment and business data. Friday’s US payroll data is likely to be a focus as the market assess the possibility of Fed easing in September.
    • Brent SEP 24 down 0.6% at 86.78$/bbl
    • WTI AUG 24 down 0.7% at 83.27$/bbl
    • Brent SEP 24-OCT 24 unchanged at 0.82$/bbl
    • Brent DEC 24-DEC 25 down 0.14$/bbl at 5.32$/bbl
  • Hurricane Beryl could impact around 73kbd of federal offshore oil output, according to the National Hurricane Center and Ocean Energy Management data. The impact is not widespread at present across GOM producers, but Shell is shutting in production at its Perdido platform and BP is evacuating non-essential employees from a couple of platforms. 
  • The EIA weekly oil data showed a large crude stock draw driven by a recovery in crude exports and rebound in refinery runs. Refinery utilisation rebounded more than expected back up to 93.5%.
  • Traded volumes are likely to be light today due to the US holiday.
  • US gasoline cracks were trading modestly higher yesterday, supported by EIA data showing rising demand and a stock draw. However, diesel cracks have pulled back slightly after reaching the highest since early April on June 2.
    • US gasoline crack down 0.3$/bbl at 24.7$/bbl
    • US ULSD crack down 0.4$/bbl at 26.34$/bbl