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OIL: Crude Rebounds on Middle East Tensions and US Stock Draws

OIL
BulletEnergy BulletsCommodities

Crude markets have rebounded from losses earlier this week with support from increasing tensions in the Middle East and industry data showing another US crude inventory drawdown. 

  • Crude front month has traded through yesterday’s highs amid news that Hamas political leader Haniyeh was killed by a strike on his home in Tehran, which it claimed was Israeli. The attack raises the risks of involvement from Iran although the response is likely to be muted given that the attack was on a Hamas leader and not an Iranian one.
  • Upside has been limited by ongoing demand concerns as China's manufacturing activity in July shrank for a third month, an official factory survey showed on July 31.
  • The Fed decision later today is a likely focus of markets. Rates are expected to be left unchanged but there is optimism that the subsequent comments will set a rate cut up for the September meeting.
  • Falling US crude inventories are supportive with API showing another 4.5mbbl decline last week, according to Bloomberg, which would be the fifth consecutive weekly drop. The official EIA data is out later today.
  • Diesel and gasoline crack spreads have fallen back from a recent peak late last week after the decline seen in the first half of July. The spreads are however edging higher today after API showed US stocks draws in both gasoline and distillates.
    • Brent OCT 24 up 1.9% at 79.55$/bbl
    • WTI SEP 24 up 2% at 76.24$/bbl
    • WTI-Brent up 0.09$/bbl at -3.77$/bbl
    • Brent OCT 24-NOV 24 up 0.06$/bbl at 0.57$/bbl
    • Brent DEC 24-DEC 25 up 0.38$/bbl at 3.41$/bbl
    • US gasoline crack up 0.2$/bbl at 23.9$/bbl
    • US ULSD crack up 0.1$/bbl at 24.48$/bbl
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Crude markets have rebounded from losses earlier this week with support from increasing tensions in the Middle East and industry data showing another US crude inventory drawdown. 

  • Crude front month has traded through yesterday’s highs amid news that Hamas political leader Haniyeh was killed by a strike on his home in Tehran, which it claimed was Israeli. The attack raises the risks of involvement from Iran although the response is likely to be muted given that the attack was on a Hamas leader and not an Iranian one.
  • Upside has been limited by ongoing demand concerns as China's manufacturing activity in July shrank for a third month, an official factory survey showed on July 31.
  • The Fed decision later today is a likely focus of markets. Rates are expected to be left unchanged but there is optimism that the subsequent comments will set a rate cut up for the September meeting.
  • Falling US crude inventories are supportive with API showing another 4.5mbbl decline last week, according to Bloomberg, which would be the fifth consecutive weekly drop. The official EIA data is out later today.
  • Diesel and gasoline crack spreads have fallen back from a recent peak late last week after the decline seen in the first half of July. The spreads are however edging higher today after API showed US stocks draws in both gasoline and distillates.
    • Brent OCT 24 up 1.9% at 79.55$/bbl
    • WTI SEP 24 up 2% at 76.24$/bbl
    • WTI-Brent up 0.09$/bbl at -3.77$/bbl
    • Brent OCT 24-NOV 24 up 0.06$/bbl at 0.57$/bbl
    • Brent DEC 24-DEC 25 up 0.38$/bbl at 3.41$/bbl
    • US gasoline crack up 0.2$/bbl at 23.9$/bbl
    • US ULSD crack up 0.1$/bbl at 24.48$/bbl