Oil Mid-Day Summary: Crude Edges Up

Front month Brent is trading higher amid signs of Russian compliance with its pledged output curbs and an anticipated decline is US shale oil production in August. Gains are limited by weaker economic data out of China, indicating lower demand for crude and products.

• Brent SEP 23 up 0.4% at 78.78$/bbl
• WTI AUG 23 up 0.5% at 74.5$/bbl
• 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. The country plans to reduce exports from its Baltic and Black Sea ports in August, as well as pipeline flows, as part of pledged exports cuts. Russia plans to reduce Q3 oil exports by 2.1mn tons.
• 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%.
• India will face difficulties buying Russian crude as Urals crude has risen above the $60/bbl price cap last week and might turn to Middle Eastern barrels instead, especially from Iraq.
• Asian imports of medium-heavy sour crude from the Middle East (excl Iran) have fallen sharply from 11mbpd in March to 9.5mbpd so far in July. Europe has broadly maintained its import levels.
• Angola’s crude exports are scheduled at 1.05mbpd for Sep, down from 1.08mbpd for Aug.
• Chinese diesel exports fell to their lowest level in more than one year in June.
• Diesel margins and time spreads rose today as a unit of Germany’s Miro refinery announced maintenance for early autumn. One unit at Shell’s Pernis refinery remains offline since Friday. The firm put the start up on hold amid noise concerns.
• Gasoil AUG 23 up 0.4% at 751$/mt
• Gasoil AUG 23-SEP 23 up 0.25$/mt at 5$/mt
• Gasoil SEP 23-OCT 23 up 0.5$/mt at 2.25$/mt
• EU Gasoil-Brent up 0.5$/bbl at 21.32$/bbl