Oil Markets Firmer Wednesday as API Shows Draw

Oil edged higher Wednesday after US API data shows another substantial inventory drop while weaker US jobs markets bolsters expectations that the Fed will pause rates in the short term.

• Brent OCT 23 up 0.4% at 85.83$/bbl
• WTI OCT 23 up 0.5% at 81.53$/bbl
• Gasoil SEP 23 up 0.6% at 936.25$/mt
• WTI-Brent down -0.02$/bbl at -4.26$/bbl
• There have been concerns about Hurricane Idalia which has barreled through the rich oil and gas producing Gulf of Mexico but there has been limited production and supply impact so far and no reports of damage.
• US stockpiles tumbled by 11.5 million barrels according to API data. If confirmed by EIA data later Wednesday - it would be the sixth drop in seven weeks.
• Key timespreads show tightening conditions as Saudi led OPEC+ cuts tighten the market. This is despite signs of higher crude supply from Russia, after seaborne flows from the OPEC+ producer hit an eight-week high.
• Brent OCT 23-NOV 23 down -0.02$/bbl at 0.56$/bbl
• Brent DEC 23-DEC 24 up 0.12$/bbl at 4.87$/bbl
• Russia’s seaborne crude shipments in the week to Aug. 27 jumped to their highest in two months according to Bloomberg vessel tracking. Total crude shipments totalled 3.4m b/d, up 0.88m b/d.
• Oil supply is expected to remain tight as a Reuters survey of analysts expects Saudi Arabia, the world's biggest oil exporter, will extend its voluntary output cut of 1mn bpd into October.
• Saudi Aramco may increase the OSP of its Arab Light crude by 30c/bbl for October sales to Asia according to a Bloomberg survey.
• The market remains reserved ahead of China’s PMI data Thursday which has showed disappointing figures in recent months.
• In the US, gasoline demand is following its seasonal path lower supported by GasBuddy and OPIS figures. The later EIA report will give further sentiment. The last boost for US gasoline demand will come from the upcoming Labor Day weekend. The US has been pulling in higher gasoline flows from Europe to help support tight supplies – which are at a 14-week high.
• US gasoline crack up 0.3$/bbl at 26.17$/bbl
• US ULSD crack up 0.5$/bbl at 51.96$/bbl