Oil Markets Flat After Further China Factory Contraction

Crude prices are flat Thursday after Chinese factory data showed another month of contraction while downside is supported by another large draw in US crude stockpiles in yesterday’s EIA data.

• Brent OCT 23 down 0% at 85.85$/bbl
• WTI OCT 23 unchanged at 81.63$/bbl
• Gasoil SEP 23 up 0.4% at 899$/mt
• WTI-Brent up 0.02$/bbl at -4.22$/bbl
• China’s official purchasing managers' index (PMI) rose to 49.7 from 49.3 in July, according to the National Bureau of Statistics, staying below the 50-point level separating contraction from expansion.
• Crude stockpiles in the US fell by 10.6 million barrels last week, the lowest since December.
• Saudi Arabia is expected to extend its 1mn bpd production cut into October according to Bloomberg survey this week, supporting a similar survey by Reuters last week. Saudi is expected to announce its intentions in the first week of September.
• There have been concerns about Hurricane Idalia which has barreled through the rich oil and gas producing Gulf of Mexico but there has been limited production and supply impact so far.
• Timespreads still signal strength as the gap between the nearest two contracts for both WTI and global benchmark Brent remain in a firmly backwardated structure.
• Brent OCT 23-NOV 23 down -0.01$/bbl at 0.61$/bbl
• Brent DEC 23-DEC 24 unchanged at 4.98$/bbl
• Russian Deputy Prime Minister Alexander Novak said the country plans to cut oil exports in September by 300kbpd against June levels according to Interfax.
• Crude inventories in ARA region fell 780k bbl in week ended August 25 to 62m bbl, down 1.2% from the week prior according to Genscape data.
• US gasoline cracks have trailed away from Friday’s surge because of the Garyville refinery fire impact. The summer driving season in the US is largely over but will be served a short-term boost for Labor Day weekend travel this upcoming weekend.
• US gasoline crack up 0.3$/bbl at 26.54$/bbl
• US ULSD crack up 0.1$/bbl at 47.25$/bbl