Recap: Ahead of the September WTI contract’s expiration at the close, the oil market on
Wednesday traded higher in light of a larger than expected draw in crude inventories. It
continued to trade within Monday’s trading range as the market continued to await the next
steps in talks to end the war in Ukraine. The market posted a low of $62.39 in overnight
trading and settled in a sideways trading range ahead of the release of the weekly petroleum
stocks report. The market later posted a high of $63.55 after the EIA reported a larger than
expected draw in crude stocks of 6 million barrels in the week ending August 15 th. The crude
market later traded sideways during the remainder of the session. The September WTI
contract went off the board up 86 cents at $63.21. The October WTI contract settled up 94
cents at $62.71, while the October Brent contract settled up $1.05 at $66.84. The product
markets ended the session higher, with the heating oil market settling up 2.85 cents at
$2.2796 and the RB market settling up 3.93 cents at $2.1283.
Technical Analysis: The crude market on Thursday will continue to trade in its recent sideways
trading range as the market awaits further developments in negotiations to end the war in
Ukraine. The market is seen finding resistance basis the October contract at $63.01, $63.27,
$63.48, $63.54, $63.68, $64.16 and $64.33. More distant resistance is seen at $65.28, $65.71
and $66.22. Meanwhile, support is seen at $61.83, $61.65, $61.45, $61.29 and $61.06.
Fundamental News: Russia’s Foreign Minister, Sergei Lavrov, said that Russia is ready to
discuss the political aspects of a settlement with Ukraine. He said Russia is ready to conduct
talks in any format and to raise the level of delegations in negotiations. However, he repeated
Moscow’s insistence that any meeting of the Russian and Ukrainian leaders should be the
culmination of such negotiations, and would need to be carefully prepared. He also said that
attempts to resolve security issues relating to Ukraine without the participation of Moscow
was a “road to nowhere”.
Roman Babushkin, an offical at the Russian embassy in India, said Russia will continue
supplying oil to India and the country’s President Vladimir Putin will meet India’s Prime
Minister Narendra Modi in New Delhi by the end of year. He said Russia has a “very, very
special mechanism” to continue oil supplies to India and added that India’s crude oil imports
from Russia will remain at the same level. The U.S. is set to impose an additional 25% tariff on
Indian exports on August 28th, citing their imports of Russian oil.
IIR Energy said U.S. oil refiners are expected to shut in about 303,000 bpd of capacity in the
week ending August 22nd, cutting available refining capacity by 77,000 bpd. Offline capacity is
expected to remain at 226,000 bpd in the week ending August 29th.
IIR said BP’s 440,000 bpd refinery in Whiting, Indiana, was in the process of restarting after
flooding disrupted its operations earlier this week. It added that the units would take several
days to ramp up. The facility aims to be back running at full rates by early next week. The
refinery reported flaring due to flooding caused by a severe thunderstorm.
TotalEnergies began a planned 60-day overhaul on the small crude distillation unit, along with
a reformer and hydrotreaters at its 238,000 bpd Port Arthur, Texas refinery. Citgo reported that operating conditions at its 165,000 bpd Corpus Christi East plant in Texas have made flaring necessary.
The U.S. EPA could rule this week on dozens of pending petitions from small oil refineries seeking exemptions from ethanol- and biodiesel-blending obligations.
Early Market Call – as of 9:35 AM EDT
WTI – Oct $62.63, down 21 cents
RBOB – Sep $2.1360, up 80 points
HO – Sep $2.2788, up 29 points
