The September Brent futures contract surpassed the $85/bbl handle again this morning, sitting at $85.30/bbl at 09:00 BST, but simmered off to $84.90/bbl by 11:25 BST (time of writing). The IEA stated in a report today that global electricity demand is set to grow at its fastest pace in nearly 20 years in 2024, supported by a surge in demand for air conditioning. In addition, about 150kb/d of Canadian crude was exported from the USGC in June, relative to monthly averages of 170kb/d over the past 12 months, despite the expansion of the Trans Mountain pipeline (TMX). China’s Petroleum and Chemical Corp (Sinopec) reported a rise of 5.08 mb/d (+0.1% y/y) in crude throughput over 1H’24 to 126.69 million metric tonne, relative to +1.7% y/y in Q1’24. Also in China, a Reuters poll shows that market players expect the nation to leave benchmark lending rates unchanged in the PBOC’s upcoming interest rate meeting despite weaker-than-expected Q2’24 economic data. Finally, at the time of writing, the front-month and six-month Brent futures spread stand at $1.10/bbl and $4.15/bbl, respectively. The Sep’24 Brent futures contract fell from $83.17/bbl at 06:50 BST to below $82.50/bbl at 11:10 BST (time of writing). ICE COT data showed that in the week to 16 July, managed by money long positions rose by 500 kb (+0.2%). Conversely, short positions surged by 18.6 mb (+19.7%), pushing outright short positions above 100mb to reach a one-month high. Chinese crude oil imports from Russia, the UAE, Brazil, and Saudi Arabia, amongst others, fell in June compared to May. China imported 8.43 million mt of Russian crude, compared to 8.91 million mt in the previous month. Imports from the US increased significantly, as China imported over 1.2 million mt of American crude compared with 432k mt in May. The People’s Bank of China cut the seven-day reverse repo rate, a key short-term policy rate, for the first time in nearly a year to help achieve the 5% growth target. In response, Chinese banks promptly lowered their benchmark lending rates, including mortgages. JODI reported that India’s total refined product demand fell by 20kb/d to 5.4mb/d in May. This remains above the 2019-2023 range. At the time of writing, the front-month and six-month Brent futures spread stand at $0.98/bbl and $3.60/bbl, respectively.
