Oil Summary: Crude Eases Back

Crude eases back towards the lows from Friday just above 85$/bbl as the market assesses the tighter market supply against ongoing global economic concerns and assisted by a stronger US dollar today.

• Brent OCT 23 down -1% at 85.4$/bbl
• WTI SEP 23 down -1% at 81.96$/bbl
• On Saturday, Saudi Arabia raised nearly all OSPs to Asia and Europe for September with Arab Light crude to Asia up 0.3$/bbl.
• Rising tensions in the Black Sea increase the risk to Russian shipments after a drone hit a Russian tanker over the weekend. A total of 15-20% of Russian crude shipments go through the Black Sea and most of its grain.
• Poland has stopped oil through part of a western section of the Druzhba pipeline after a leak late on Saturday. Crude flows are expected to resume on Tuesday morning. Germany’s Leuna oil refinery has adjusted its processes, a precaution measure amid the leak.
• Kazakhstan intends to supply 100,000t of oil to Germany in August.
• The reopening of Pemex’s oil-export terminal Salina Cruz has been delayed by bad weather.
• Iraq’s federal government and the KRG will form a committee to produce a final draft of an oil and gas bill to resolve the ongoing dispute over production and revenue sharing.
• Chinese crude imports showed signs of weakness in July at almost 1.5mbpd less crude than in June.
• China's state-controlled Shaanxi Yanchang Petroleum Group is to double its purchases of Russian ESPO blend this year to about 1m mt.
• Russian exports of refined oil products increased in July as refinery runs increased and turnarounds eased. Exports are expected to rise again in August.
• Exxon’s Baton Rouge refinery was attempting a restart of a 120kb/d FCC unit over the weekend. The restart is sooner than previously expected with repairs previously due for completion on 10 Aug and a return to operations mid-August.
• A tight market and potential deficit this year is reflected in the strong curve backwardation with prompt and longer dated spreads holding onto gains seen in recent weeks.
• Diesel and gasoline crack spreads are holding steady today after last week saw gasoline cracks ease lower following weak demand concerns. Diesel markets are maintaining recent strength support by tight supplies, recent refinery disruptions and low global inventories.
• US gasoline crack up 1$/bbl at 35.18$/bbl
• US ULSD crack down -0.2$/bbl at 45.81$/bbl