Oil End-Day Summary: Crude Extends Gains

Front month Brent extended earlier gains amid signs of Russian compliance with its pledged output curbs, an anticipated decline is US shale oil production in August, while stocks advanced as weaker-than-expected US retail sales eased market pricing for the Fed tightening cycle.

• Brent SEP 23 up 1.3% at 79.51$/bbl
• WTI AUG 23 up 1.6% at 75.3$/bbl
• Stocks advanced as weaker-than-expected US retail sales eased market pricing for the Fed tightening cycle, which peak rate pricing holding below 5.40% in OIS terms. Equity indices were also buoyed by solid US earnings; Morgan Stanley added over 6% post-earnings."
• Russia’s pledge to cut crude output and exports is starting to show. Russian seaborne crude shipments in the four-week period to 16 July fell to a six-month low.
• Russian Urals crude prices have fallen back just below $60/bbl.
• US shale oil production is projected to see in August its first monthly decline since December 2022, data from the EIA showed on Monday.
• Loadings at Shell’s Forcados crude oil terminal in Nigeria remain halted since Wednesday. Three tankers are waiting at the terminal. Further inspections are scheduled for today or tomorrow.
• China’s GPD grew only 0.8% in April-June vs the previous quarter. Major banks revised down China’s 2023 GPD growth forecasts to 5%.
• Asian imports of medium-heavy sour crude from the Middle East (excl Iran) have fallen sharply from 11mbpd in March to 9.5mbpd so far in July.
• Europe has turned to Latin American medium-heavy crude and US light sweet crude since the introduction of Russian sanctions.
• Angola’s crude exports are scheduled at 1.05mbpd for Sep, down from 1.08mbpd for Aug.
• Libya plans to export 1.06mbpd of crude in July, up from 1.01mbpd in June.
• Chinese diesel exports fell to their lowest level in more than one year in June.
• Indian oil products demand is set to rise by 7% in 2023 vs 2019.
• High maintenance levels on European steam crackers will curb European naphtha demand in Q3.
• Russian seaborne diesel and gasoil exports rose by 11% so far in July MoM.
• Diesel margins and time spreads rose earlier today before easing back as a unit of Germany’s Miro refinery announced maintenance for early autumn. One unit at Shell’s Pernis refinery remains offline since Friday. The firm put the start up on hold amid noise concerns.
• Gasoil AUG 23 up 1% at 755.75$/mt
• EU Gasoil-Brent up 0.4$/bbl at 21.22$/bbl
• Gasoil AUG 23-SEP 23 down -0.5$/mt at 4.25$/mt
• Gasoil SEP 23-OCT 23 unchanged at 1.75$/mt