Oil Summary: Crude Edges Down

Crude pulls back from highs seen last week as market focus turns to oil demand growth in China with concern for a worsening property sector ahead of official data released this week.

• Brent OCT 23 down -0.3% at 86.59$/bbl
• WTI SEP 23 down -0.3% at 82.93$/bbl
• WTI-Brent down -0.11$/bbl at -4.28$/bbl
• Crude managed money net long positions remain stable, but diesel positioning continues to increase according to Commitments of Traders data released on Friday. The combined net long positions for Brent and WTI decreased slightly from the 15 week high seen the previous week, by -6k to 397k. ICE Gasoil net positions extended the recent gains up to the highest since March 2022 and Nymex diesel the highest since Feb 2022 amid tight global diesel markets.
• Crude in floating storage that has been stationary for at least seven days fell by 4.2% last week to 99.67mn bbl as of 11 August.
• Iran's crude production is now just short of 3.2mn bpd and is due to rise to 3.3mn bpd before the end of August, Iraq’s oil minister Javad Owji said.
• The latest EIA US drilling productivity report is due for release today at 14:00ET.
• High prices for North Sea sour crudes are prompting European refiners to switch to sweeter grades, in particular US WTI, with loadings of the grade into Europe rising 25% m/m in July.
• Azeri BTC crude oil exports from Turkey's Ceyhan port have been set at 17.55 million barrels for September, down from 19.04 million barrels in August.
• The Black Sea CPC oil terminal has completed planned maintenance at one of its three moorings August 14 and it is now in operation.
• Diesel markets are softer today with crack spreads pulling back from the highest since January with demand concerns limiting upside despite ongoing tight supplies and low global inventories. IEA last week said OECD European crude processing is expected to decline 600kbpd y/y in Q3. Gasoline crack spreads are holding steady today after edging higher last week with a slight recovery in demand in data last week.
• US gasoline crack down -0.3$/bbl at 40.36$/bbl
• US ULSD crack up 0.1$/bbl at 47.83$/bbl
• The refining system remains structurally tight, following significant disruptions and closures over the past seven years according to a note from Goldman Sachs. The market is vulnerable to even small shocks with problems exacerbated by divergent demand, a refining system ill-suited to the lightened slate and hot weather.
• Weekly US gasoline demand was down by 1.4% w/w for the week ended August 12 according to GasBuddy data which placed demand at 8.92mn bpd for the week.
• ExxonMobil is overhauling a reformer at its 619,024 bpd Beaumont, Texas refinery, for three weeks.
• Marathon were reported to be restarting the cat feed hydrotreater (CFHU) at its 593,000 bpd Galveston Bay Refinery in Texas City, Texas, over the weekend according to Reuters sources.