The Oct’24 Brent futures contract stood above $79.50/bbl at 08:00 BST today but slid off to $78.80/bbl by 11:25 BST (time of writing). The Oct/Nov Brent futures spread also softened from above $0.80/bbl at 07:00 BST to $0.75/bbl at the time of writing). A vital driver of the weakness in the benchmark crude futures is the increasingly worrisome outlook for China’s economy and oil demand. China’s gasoline exports declined by 35.7% y/y in July to 5.77mb/d (or 790,000 mt), as per data by the General Administration of Customs. This decline in exports highlights lower crude processing levels in China and a refinery run cut amid weak profit margins. In other news, CFTC data for the week ending 13 Aug recorded managed-by-money players in Brent futures adding nearly 11.3mb (+6.85%) to their longs while liquidating over 35mb (-23.3%) from their shorts. However, prod/merc players trimmed 33.6mb (-3.80%) from their longs this week, while their short-positioned counterparts added 1.2mb (+0.10%) to their shorts. In addition, open interest in Brent futures came off by 16.1mb w/w (-0.70%). Finally, at the time of writing, the Oct/Nov’24 and Oct/Apr’25 Brent futures spreads stand at $0.75/bbl and $2.55/bbl.
