The September Brent futures flat price saw quite volatile price action this afternoon, dropping below $86.00/bbl at 15:50 BST before it recovered to $86.40/bbl at 17:25 BST (time of writing). The EIA release this afternoon showed a ginormous draw of over 12mb in US crude inventories for the week ending 28 June. The bulk of the fall in crude inventories came on the US Gulf Coast (PADD III) with a 7.1 mb decline, followed in second position by the West Coast (PADD V) with a draw of 4 mb. However, changes in this week’s inventory numbers must be taken with a pinch of salt as the EIA’s adjustment factor for crude oil supply swung from 1326 kb/d in the previous week to -606 kb/d in the latest data. There was also a 2.2mb and 1.5mb draw in gasoline and gasoil inventories in the week, both larger draws than expected. The US dollar index sank to its lowest in almost 2 weeks, at 104.937 from over 105.300 at mid-day. US June ISM services PMI fell to a 4-year low of 48.7, compared to the forecast 52.7. On top of this, the ISM services business activity and new orders index both fell into contraction after being forecast to expand. Hurricane Beryl approaches Jamaica, weakening to a category 4 after killing at least 6 in the Caribbean. At the time of writing, the front and 6-month spreads are $0.79/bbl and $3.67/bbl, respectively.
