The September Brent futures contract has been on an upward trend all morning, rallying to $86.10/bbl before meeting resistance here. The soon-to-be-prompt futures are now trading at $85.75/bbl as of 11:25 BST (time of writing). The still-prompt August Brent futures contract rallied into the $87/bbl handle ahead of today’s expiry but has since softened to $86.90/bbl. Saudi Arabia may cut prices for its crude grades to Asia for a second consecutive month in August. As per a Reuters survey, the OSP for Arab Light crude may decline by 60c m/m to 80c/bbl, its lowest level since April. This hike interestingly follows a decline in Saudi Arabian crude oil exports to China in July, for a third consecutive month, to 36mb (prev: 39 mb), reportedly over high OSPs. In addition, Spain’s Repsol is reportedly planning to merge its North Sea oil and gas business in the UK with private equity company NEO Energy. The merger would build a company with an output surpassing 110kb/d of oil. In macroeconomic matters, US personal consumption data, the Fed’s preferred measure of inflation, is due to be released today at 13:30 BST. In geopolitical affairs, a suspected missile attack by the Yemen-based Houthis targeted a ship in the Gulf of Aden on 27 June amid the latest escalation of attacks on commercial vessels in the Red Sea. In addition, there appears to be growing risk regarding growing tensions between Israel and the Lebanon-based Hezbollah. Finally, uncertainty also comes in from elections in the US, following concerns regarding President Biden’s performance in yesterday’s debate, along with the upcoming general elections in Iran and France this week, the former of which may further shape developments in the conflict in the Middle East. At the time of writing, the Sep/Oct and Sep/March’25 Brent futures spreads stand at $0.79/bbl and $3.58/bbl, respectively.
