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European Window: Brent Rallies alongside EIA Draw

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The September Brent futures contract weakened to $81/bbl at 16:05 BST, where it found support and sharply rallied to $82.20/bbl at 16:35 BST. The benchmark crude futures contract has since simmered off to $81.90/bbl as of 17:15 BST (time of writing). This recent support likely emerged on the back of US oil inventories data for the week ending 19 July released by the EIA at 15:30 BST today. The data showcased a 3.741mb draw in US crude oil inventories against median estimates of a 2.837mb draw. In addition, Cushing inventories witnessed a draw of 1.708mb, surpassing the 1.6mb draw predicted by the API last night. Interestingly, however, refinery utilization has declined by a further 2.1% to 91.6%. In refined fuel, US gasoline stocks witnessed a remarkable 5.572mb draw (median estimates: 1.11mb build), while distillate fuel oil inventories witnessed a 2.753mb draw (median estimates: 1mb build). In other news, crude oil deliveries to India, the world’s third-largest oil importer and consumer, fell by 5.6% y/y and 16.25% m/m to 18.45 million metric tonnes in June to their lowest since February. In macroeconomic news, the Bank of Canada lowered its key interest rate by 25 basis points to 4.5% for the second month in a row. The central bank also lowered its 2024 GDP forecast down from 1.5% to 1.2%. Finally, at the time of writing, the front-month and six-month Brent futures spreads stand at $0.90/bbl and $3.50/bbl, respectively.

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Our team of skilled analysts, by utilising the depth and breadth of Onyx's proprietary data, position ourselves at the cutting edge of market analysis. This unique vantage point grants us an unparalleled perspective in the market, enabling us to identify emerging trends and lucrative opportunities.