Asian crude benchmark Dubai outperformed WTI and Brent, as a tight East of Suez sour crude market contrasted sharply with a comfortably supplied Atlantic Basin.
Additional voluntary cuts by some OPEC members and a weaker US dollar failed to dispel the macro gloom. Amid range-bound trading, ICE Brent futures fell by $1/bbl m-o-m in June to $75/bbl, as hawkish central bank policies continued to weigh on investor sentiment.Preliminary data show a 9.2 mb draw in June. Oil on water declined by 23 mb as additional OPEC+ output cuts saw seaborne oil exports falling to their lowest since January. By contrast, OECD oil stocks drew by a marginal 1.8 mb. A substantial 44.2 mb build in non-OECD countries, led by a surge in China, pushed global observed oil inventories up by 19.4 mb in May to the highest since September 2021.Moscow has promised a further 500 kb/d cut to exports from August to stem declining prices and revenues, but may hold production steady as domestic oil demand rises seasonally. Estimated export revenues plunged by $1.5 bn to $11.8 bn – nearly half the levels of a year ago. Russian oil exports fell 600 kb/d to 7.3 mb/d in June, their lowest since March 2021.
Refining margins remain robust, with very strong Atlantic Basin gasoline cracks and rapid gains in diesel, jet fuel and fuel oil more than offsetting weak naphtha cracks. Higher Russian crude runs and the start-up of new refining capacity underpin the revision.
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