October WTI crude oil (CLV25) today is up +0.34 (+0.54%), and October RBOB gasoline (RBV25) is up +0.0224 (+1.14%).
Crude oil and gasoline prices today are climbing, with crude posting a 1.5-week high and gasoline posting a 2.5-week high. Crude and gasoline have carryover support from Wednesday, when weekly EIA crude and gasoline inventories fell more than expected. Also, strength in global manufacturing activity is supportive for energy demand and crude prices. Gains in crude are limited after the dollar index (DXY00) rose to a 1-week high.
Signs of strength in global manufacturing activity are bullish for energy demand and crude prices. The US Aug S&P manufacturing PMI unexpectedly rose +4.5 to 53.3, better than expectations of a decline to 49.7 and the strongest pace of expansion in 3 years. Also, the Eurozone Aug S&P manufacturing PMI unexpectedly rose +0.7 to 50.5, stronger than expectations of a decline to 49.5 and the fastest pace of expansion in 3 years.
Doubts about an imminent end to the Russian-Ukrainian war may keep sanctions against Russia's crude exports in place for longer and support crude prices after Russian Foreign Minister Lavrov said Russia should have a say in security arrangements for Ukraine, and that any unilateral guarantees would be "hopeless."
Concern about higher OPEC production is bearish for crude prices after OPEC+ on August 2 endorsed an additional 547,000 bpd increase in its crude production for September 1. OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026. OPEC+ has 1.66 million bpd of supplies that are currently due to remain offline until late 2026. OPEC July crude production fell by -20,000 bpd to 28.31 million bpd.
A decline in crude oil held worldwide on tankers is bullish for oil prices. Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -12% w/w to 82.49 million bbl in the week ended August 15.
Wednesday's weekly EIA report showed that (1) US crude oil inventories as of August 15 were -5.6% below the seasonal 5-year average, (2) gasoline inventories were -0.7% below the seasonal 5-year average, and (3) distillate inventories were -13.0% below the 5-year seasonal average. US crude oil production in the week ending August 15 rose by +0.4% w/w to 13.382 million bpd, modestly below the record high of 13.631 million bpd posted in the week of 12/6/2024.
Baker Hughes reported last Friday that the number of active US oil rigs in the week ending August 15 was unchanged at 411 rigs, just slightly above the 3.75-year low of 410 rigs from August 1. Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.25-year high of 627 rigs reported in December 2022.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
