Oil End of Day Summary: Crude Edges Down

Crude resumed declines after the release of US CPI data and OPEC’s MOMR, following initial volatility earlier in the day.

• Brent OCT 23 down -0.6% at 87.04$/bbl
• WTI SEP 23 down -0.9% at 83.63$/bbl
• Core CPI M/M: 0.16% (0.2% expected, 0.2% prior), Headline CPI M/M: 0.167% (0.2% expected, 0.2% prior)
• Unrounded % Y/Y (NSA): Headline 3.178%; Core: 4.653% (from 4.829%)
• OPEC has kept its world oil demand growth forecast steady at 2.4m b/d for this year and at 2.2m b/d for 2024, in line with last month’s forecast. Non-OPEC liquid supply growth has been revised upwards slightly from July by 100k b/d to 1.5m b/d. Saudi Arabian output declined by 968k b/d last month.
• The WTI crude second month 25 delta put skew has risen to the least bearish since March with a trend higher in place since mid May. The options market is reflecting the tight market expectations for H2 amid OPEC+ supply cuts and current risks from tensions in the Black Sea. The second month WTI 25 delta call-put skew has risen from below -4% last week up to as narrow as 2.75% yesterday before easing back to -3.25% today. The Brent second month call-put skew has closed in to around -3% this week but remains below a high of -2.25% in late July. The Brent Dec23 call-put skew is up to -3.85% with WTI Dec23 at -4.7% after a slight recovery higher today.
• Wait times at the Panama Canal have continued to rise to 21 days as of 8 August, up from 18 days on 4 August.
• Near term time spreads have spiked higher in recent days on the increasing supply risks while longer dated spreads are also rallying although moves have been more muted. Brent Oct-Nov is up to the peak seen in April while Dec23-Dec24 has edged above the high from last week.
• Brent OCT 23-NOV 23 down -0.02$/bbl at 0.61$/bbl
• Brent DEC 23-DEC 24 down -0.11$/bbl at 5.2$/bbl
• Russian June crude oil output declined to 9.5mbpd in June, almost in line with its pledged cuts.
• Russian Northern Sea Route crude shipments across the Arctic has been off to a record start in July with already five tankers heading to China according to Bloomberg ship tracking.
• Lower Russian crude exports mean constraints on the fleet trading Russian crude look unlikely despite the Urals price increase according to Votexa.