OIL: Crude Ticks Higher with Further US Crude Stock Draw Expected

Crude prices tick higher again after API industry data showed another US crude inventory drawdown ahead of the updated EIA data later today and the latest US July CPI data.

• Front month Brent pulled back from a high of $82.4/bbl yesterday after both IEA and OPEC revised demand outlooks for China slightly lower this week.
• IEA forecast for global oil demand was just slightly lower than predicted in last month’s report with growth of 970kb/d in 2024 and 953kb/d in 2025 amid a meaningful shift in drivers with weakness in China and signs of strength in the US. The oil market could switch from a deficit due to peak summer demand to a surplus in Q4 if OPEC+ increases supply as is currently planned.
• API data showed US crude stocks drew by 5.2mbbl, according to Bloomberg, which would be the seventh consecutive weekly decline if confirmed in EIA data later today. Gasoline fell 3.69mbbl but distillate rose 612kbbl.
• Geopolitical risks continue to support prices with an attack by Iran or Hezbollah on Israel expected and Ukraine’s continued incursion into Russian territory.
• US gasoline cracks yesterday fell to the lowest since February amid signs of a decline in US demand, coupled with robust seasonal supply.
  • Brent OCT 24 up 0.6% at 81.17$/bbl
  • WTI SEP 24 up 0.6% at 78.85$/bbl
  • Brent OCT 24-NOV 24 up 0.04$/bbl at 0.8$/bbl
  • Brent DEC 24-DEC 25 up 0.07$/bbl at 3.93$/bbl
  • US gasoline crack down 0.3$/bbl at 21.22$/bbl
  • US ULSD crack down 0.1$/bbl at 21.98$/bbl