OIL: Crude Softer with Demand Concern Set Against Tighter Supply

Crude prices are softer so far today after pulling back from a Brent high of $85.81/bbl yesterday. Markets are weighing tighter supply, inventory draws and prospects of easier Fed policy against potential consumption weakness in US and China.

• A focus for markets is the Third Plenum on China, where headlines point to efforts to boost domestic demand, but details remain light at this stage.
• Alberta wildfires remain a threat for ~400kbd of oil production in Canada at present. Meg has evacuated non-essential staff from its Christina Lake site, but production is unaffected at present.
• OPEC will hold a market monitoring meeting next month, at which no changes to its fourth-quarter output plans are expected according to both Bloomberg and Reuters sources.
• Two oil tanker are on fire to the east of Singapore although the cause is unclear. The fire suggests the risk of using aging vessels as part of the dark fleet to move sanctioned barrels, according to Bloomberg.
• Diesel cracks are maintaining the trend lower this week amid weak demand while gasoline found sound support yesterday to hold relatively flat on the week.
  • Brent SEP 24 down 0.5% at 84.69$/bbl
  • WTI AUG 24 down 0.6% at 82.29$/bbl
  • WTI SEP 24 down 0.7% at 80.72$/bbl
  • Brent SEP 24-OCT 24 down 0.03$/bbl at 1.15$/bbl
  • Brent DEC 24-DEC 25 down 0.18$/bbl at 4.75$/bbl
  • US gasoline crack down 0.1$/bbl at 22.97$/bbl
  • US ULSD crack up 0.1$/bbl at 21.82$/bbl