Oil Summary: Crude Stable Ahead of US CPI Data

Crude slightly dipped ahead of the US CPI data release later today. The overall crude market continued the recent strength with supply risks from rising tensions in the Black Sea adding to the production cuts from Saudi and Russia that has driven the rally since the start of July amid ongoing economic uncertainties.

• Brent OCT 23 down -0.1% at 87.43$/bbl
• WTI SEP 23 down -0.3% at 84.16$/bbl
• The US CPI data due at 08:30 ET is expected to soften and could help firm market expectations that the Fed’s hiking cycle is over.
• The updated OPEC Monthly Oil Market Report will be released today at approximately 13:30 CET.
• Oil supply cuts from Saudi Arabia and Russia are curbing the demand for tankers, leading to a decline in the crude shipping costs according to Bloomberg.
• Wait times at the Panama Canal have continued to rise to 21 days as of 8 August, up from 18 days on 4 August.
• Near term time spreads have spiked higher in recent days on the increasing supply risks while longer dated spreads are also rallying although moves have been more muted. Brent Oct-Nov is up to the peak seen in April while Dec23-Dec24 has edged above the high from last week.
• Brent OCT 23-NOV 23 up 0.02$/bbl at 0.65$/bbl
• Brent DEC 23-DEC 24 down -0.06$/bbl at 5.25$/bbl
• Diesel and gasoline cracks have rallied post EIA data showing falling stocks and recovering implied demand. Gasoline implied demand showed a recovery after the trend lower in recent weeks. Distillates four-week average demand gained ground despite a small decline on the week. Diesel cracks are the highest since early Jan amid tight supplies and low stocks while gasoline as recovered some of the decline seen last week.
• US gasoline crack down -0.7$/bbl at 38.34$/bbl
• US ULSD crack down -1$/bbl at 49.61$/bbl
• The updated Insights Global European ARA product inventories will be released today.
• US refiners will run their plants at up to 95% for the remainder of Q3 at around 17.9m b/dm despite extreme summer heat.
• Refinery margins have rebounded from lows of Q2, driven by transport fuels and jet fuel, a trend expected to continue throughout 2023.