Oil Summary: Crude Pulls Back on Weak China Data

Crude is pulling back today after reaching a high of 86.7$/bbl earlier this month. A stronger US dollar has weighed on prices while softer Chinese import cause markets to weigh oil demand growth potential.

• Brent OCT 23 down -1.6% at 83.97$/bbl
• WTI SEP 23 down -1.5% at 80.68$/bbl
• Chinese imports fell as the economy slowed amid muted summer industrial activity. China’s crude imports in July decreased to a six-month low at 43.69mn tons, down by 19% from June levels.
• A western section of the Druzhba pipeline has been fully repaired after a leak and flows have been restored on Monday evening.
• The latest EIA Short Term Energy Outlook report is due out later today as the market looks to assess the impact of economic concerns and OPEC+ cuts on a supply deficit largely expected this year.
• The crude time spreads have followed the decline in front month futures in the last couple of days due to softer China imports and concerns for fuel oil demand growth, but curve backwardation remains strong with Saudi and Russian cuts expected to keep the market tight. The Brent Dec23-Dec24 spreads have pulled back from a high of 5.27$/bbl but well above levels around 2.75$/bbl from the start of July.
• Brent OCT 23-NOV 23 down -0.02$/bbl at 0.38$/bbl
• Brent DEC 23-DEC 24 down -0.33$/bbl at 4.34$/bbl
• The price differential between Brent and Dubai crude is trading increasingly negative as global crude flows redirect. The spread was at a discount of -1.60$/bbl 7 Aug compared with a premium of more than +3$/bbl in January. Brent generally trades at a premium to Dubai.
• India's fuel consumption, a proxy for oil demand, rose by 1.9% year-on-year in July to around 18.09 million tonnes.
• ARA diesel and gasoil arrivals have slowed in August and imports may remain lower beyond this month amid the start of seasonal maintenances in other regions.
• TotalEnergies’ Port Arthur 238kb/d refinery in Texas will begin a multiunit turnaround on 21 Aug
• Diesel cracks are edging lower after the strength seen in July while gasoline cracks have found some support after the recent pull back. Cracks have been supported by tight supplies, recent refinery disruptions and low global inventories although refinery outages have eased from the high levels seen in June.
• US gasoline crack down -0.5$/bbl at 35.87$/bbl
• US ULSD crack down -0.9$/bbl at 43.93$/bbl