Oil Summary: Crude Rises Ahead of OPEC Meeting

Crude is extending yesterday’s gains in response to the largely expected Saudi and Russian cut extensions into September, ahead of the OPEC JMMC Meeting at 14:00 CET (13:00BST) and the US nonfarm payrolls release at 08:30ET (13:30BST).

• Brent OCT 23 up 0.6% at 85.64$/bbl
• WTI SEP 23 up 0.6% at 82.05$/bbl
• Along with the rally in Brent on tightening supplies, key physical crude market indicators in Asia have also strengthened further after Saudi Arabia and Russia extended voluntary supply cuts.
• Crude backwardation has seen a gradual strengthening since late June amid tighter supplies as Saudi have extended the voluntary cuts initial from July into August and now again into September. The prompt WTI spread is back up to the highest seen since November while most other spreads are at or near the highest since April.
• Brent OCT 23-NOV 23 up 0.03$/bbl at 0.48$/bbl
• Brent DEC 23-DEC 24 up 0.14$/bbl at 5.06$/bbl
• WTI SEP 23-OCT 23 up 0.02$/bbl at 0.49$/bbl
• WTI DEC 23-DEC 24 up 0.17$/bbl at 5.59$/bbl
• The OPEC JMMC meeting takes place today at 14:00 CET to review the impact of production cuts but is not expected to make any recommendations to change overall policy.
• Russian authorities lifted marine traffic halt in Novorossiysk port in the Black Sea at 10:39am Moscow time, after authorities temporarily closed the port after a drone attack.
• Rising crude oil exports from the US are exerting downward pressure on European and Asian oil prices, acting as a counterbalance against production cuts and embargoes on Russian oil.
• Prices of gasoil and gasoline in China have gathered momentum in Q3 and are expected to continue an upward trajectory throughout the quarter according to OilChem.
• Diesel markets are holding on recent gains today with the US and Europe front month cracks this morning up at the highest since early Feb amid ongoing refinery disruptions and tight supplies.
• Total late yesterday reported disruption in a unit at Normandy Complex in France. The firm has also stopped the Unit 825 at its Port Arthur refining/petchem complex on Thursday after a leak at a pump. BP has moved a planned September turnaround at its 435kbpd Whiting, Indiana, refinery to August.
• The prompt Gasoil time spread is holding just below the highest since March seen earlier this week while the Dec23-Dec24 spread is holding jus below the record high levels around 88$/mt from 2 Aug.
• Gasoil AUG 23 up 1.4% at 912.25$/mt
• Gasoil AUG 23-SEP 23 unchanged at 14.75$/mt
• Gasoil DEC 23-DEC 24 up 4.75$/mt at 84.5$/mt
• EU Gasoil-Brent down -0.3$/bbl at 32.93$/bbl
• US ULSD crack down -0.5$/bbl at 47.51$/bbl