OIL: Crude Steadies After Rally Amid Libya & Middle East Supply Risks

Crude markets are holding steady today after a rally from a Brent front month low of $75.65/bbl on Aug 21. Upside pressure is driven by supply risk from Libya, tensions between Iran and Israel, and low US inventories. Fed cut optimism is also supportive to offset some of the previous global demand growth concern.

• Libya’s Eastern-based government announced a “force majeure” at all fields, terminals and oil facilities, Bloomberg said. The move is in response to the rival Tripoli-based government’s attempt to take control of the Libyan central bank. A blockade by Libya’s Eastern-based government could cut output to around 200kb/d, down from 1.15mb/d in July, according to an updated estimate by Stratfor.
• Exchanges of rocket fire between Israel and Hezbollah over the weekend have renewed concerns of an expanded conflict in the region.
• A net decline in US crude inventories since late June has added price support and another draw of 3mbbl is expected this week according to a preliminary Reuters survey ahead of API data today and EIA data tomorrow.
• Gasoline cracks yesterday fell further to the lowest level since November despite indications of rising demand last week. US retail gasoline demand saw a rise of 1.9% for the week ending August 24 to reach 9.15mb/d, according to GasBuddy.
  • Brent OCT 24 up 0.1% at 81.48$/bbl
  • WTI OCT 24 down 0.1% at 77.37$/bbl
  • Brent OCT 24-NOV 24 up 0.06$/bbl at 1.13$/bbl
  • Brent DEC 24-DEC 25 down 0.04$/bbl at 4.09$/bbl
  • US gasoline crack up 0.1$/bbl at 12.71$/bbl
  • US ULSD crack up 0.1$/bbl at 22.38$/bbl