Oil Steady After Extending Rally Yesterday on Tight Supplies

Crude oil markets are holding steady today after gains yesterday saw a continuation of the rally since mid July driven by tighter OPEC supply and improving economic expectations as the US looks to avoid a recession.

• Brent OCT 23 down -0.3% at 85.16$/bbl
• WTI SEP 23 down -0.3% at 81.55$/bbl
• Gasoil AUG 23 up 1% at 885.75$/mt
• WTI-Brent down -0.29$/bbl at -4.09$/bbl
• Saudi Arabia lowered its output by 860kbpd month on month in July after the country pledged to cut production by 1mbpd as OPEC oil output fell to the lowest level since Sep 21. Saudia Arabia is largely expected to extend the voluntary output cuts into September.
• Production has also reduced in Nigeria amid the suspension of loadings from the Forcados oil terminal on 12 July. Loadings attempted to resume on 25 July before they were halted again due to a leak.
• Iran's crude oil output has risen to the highest level since nearly five years according to a key member of parliament’s energy commission.
  • Brent OCT 23-NOV 23 down -0.02$/bbl at 0.46$/bbl
  • Brent DEC 23-DEC 24 down -0.06$/bbl at 4.93$/bbl
• The tight supply is reflected in the strong curve backwardation with the Dec23-Dec24 spread following the front month rally and the prompt WTI spread is holding near the highest since November.
• Diesel and gasoline markets are holding recent strength after refinery disruptions in July and amid low inventory levels. The Gasoil Dec23-Dec24 spread is the highest since Nov 2021. US gasoline demand was last week 1.6% below the four-week average and peak summer demand appears to have peaked according to GasBuddy.
  • US gasoline crack down -0.1$/bbl at 40.01$/bbl
  • US ULSD crack up 0$/bbl at 44.11$/bbl