Oil Summary: Crude Holds Onto Gains

Crude prices have hold onto gains today and broke through the resistance as signs of further supply tightening from Saudi Arabia and stronger oil demand from Chinese support prices.

• Brent SEP 23 up 0.7% at 85.57$/bbl (expiry today)
• Brent OCT 23 up 1% at 85.28$/bbl
• WTI SEP 23 up 1.2% at 81.58$/bbl
• BRENT TECHS: (V3) Bulls Remain In The Driver’s Seat
• RES 4: $86.18 - High Jan 23
• RES 3: $85.60 - High Jan 27
• RES 2: $84.79 - High Apr 12 and a key resistance
• RES 1: $84.50 - High Jul 28
• The latest Bloomberg survey and Goldman Sachs note suggested Saudi Arabia will extend its 1mbpd voluntary output cuts into September.
• Goldman Sachs said global oil demand has risen to an all-time high in July of 102.8mb/d and revised 2023 demand by around 550kb/d. It sees solid demand driving a larger-than-expected 1.8mb/d deficit in the second half this year. Goldman’s Currie said in an interview the largest factor behind the latest oil price rally is Chinese demand.
• Energy Aspects Head of Research Amrita Sen said: “I think Chinese oil demand has been very strong, gasoline/jet has been growing, overall demand has been up by 2mn bpd. That hasn’t been the problem [for prices], the problem has been we have destocked an enormous amount of crude.”
• Iran’s crude output has risen to 3.1mbpd according to a parliament member.
• A Reuters Survey Suggested OPEC crude output fell by 840kbpd MoM to 27.34mbpd in July.
• The latest EIA monthly petroleum supply data put US May crude output at 12.662mbpd vs 12.677mbpd in April.
• Crude floating storage fell 2.2% last week to 105.06mn barrels as of 28 July.
• Oman raised its crude OSP for September to $80.54/bbl.
• Russian refinery processing rates averaged 5.62mbpd in July, up by 2.8% MoM.
• According to GasBuddy data, weekly (Sun-Sat) US gasoline demand was down 0.8% from the prior week and 1.6% below the four-week average. GasBuddy models US gasoline demand at 8.93mbpd and commented that peak summer demand appears to have peaked.
• US gasoline imports from Europe rose to a 3-week high of 225kbpd last week.
• US gasoline crack down -1.2$/bbl at 39.22$/bbl
• US ULSD crack down -0.9$/bbl at 42.53$/bbl