Oil Summary: Crude Edges Higher

Crude oil edges back positive on the day after IEA earlier revised up its global oil demand forecast for this year to 102.2mbpd.

• Brent OCT 23 up 0.4% at 86.76$/bbl
• WTI SEP 23 up 0.4% at 83.13$/bbl
• IEA has revised up its global oil demand forecast for this year to 10.2mbpd, up from 102.1mbpd in July, boosted by strong summer air travel, increased oil use in power generation and surging Chinese petrochemical activity. OPEC yesterday kept its global oil demand forecast stable for this year at 102mbpd but showed a supply deficit of more than 2mbpd in Q3.
• JP Morgan forecasts Brent crude prices to continue to rally to $90/bbl or above by September, while prices are expected to ease back in the fourth quarter of this year and 2024.
• Time spreads followed the decline late yesterday after near term spreads had spiked higher in recent days on the increasing supply risks amid Black Sea tensions. The prompt Brent spread reached the highest since March while the prompt WTI spread rose to the highest since November.
• Brent OCT 23-NOV 23 up 0.07$/bbl at 0.63$/bbl
• Brent DEC 23-DEC 24 up 0.05$/bbl at 5.03$/bbl
• China is expected to buy around 40% more crude from Saudia Arbia in September versus August via term contracts amid the start up of China’s Rongsheng mega refinery.
• Indian buyers have no plans to reduce Russian crude imports, despite narrowing discounts to global benchmarks.
• Crude oil production in Nigeria fell 12.56% in July to 1.29m b/d, compared to 1.48m b/d in June.
• Gasoline crack spreads are extending the trend higher seen this week supported by data on 9 Aug showing another drop in total US stocks mostly driven by a decline on the Gulf Coast. EIA data this week showed total US stocks 7.1% below the five-year average for this time of year.
• New York gasoline imports have slowed to around 310kb/d so far in August, down from 390kb/d in July and 440kb/d in June.
• Several Saudi gasoline cargoes have been diverted to the Bahamas since the biggest East Coast refinery at Bayway restarted last month.
• Drivers in the US are covering record miles but are using less gasoline due to more efficient vehicles. June broke a travel record for that month with 283 trillion vehicle miles but implied gasoline demand for the month was 5% below the 2019 level.
• RBOB SEP 23 up 0.6% at 2.92$/gal
• EU Gasoline-Brent up 0.5$/bbl at 26.42$/bbl
• US gasoline crack up 0.3$/bbl at 39.48$/bbl