Oil prices have continued yesterday’s rally back to start of the week levels supported by increased geopolitical risks involving Iran, fifth consecutive weekly US crude stock drawdown, and a more dovish Fed Powell ahead of the OPEC monitoring committee meeting. 

• Geopolitical tensions have risen with Israel reportedly killing the political leader of Hamas in Tehran. Iran’s Ayatollah Khamanei has called for a direct attack on Israel, according to the NY Times, while Israeli PM Netanyahu has cautioned that there are “challenging days ahead”.
• China’s manufacturing Caixin PMI for July fell to 49.8, after 51.8 and expectations of 51.5 as oil markets continue to worry about the strength of China’s demand.
• Reuters sources suggest the OPEC JMMC panel is unlikely to make any policy changes at the meeting today. The market however remains uncertain whether OPEC+ will maintain current plans to return some supply from October amid risks of a market surplus.
• EIA yesterday reported a fifth consecutive weekly draw in US crude inventories with a surge in exports to just below 5mbpd to offset an unexpected drop in refinery runs.
• Gasoline cracks ended yesterday higher, supported by a fall in US stocks while demand held most of the gains from the previous week despite a small dip. 
  • Brent OCT 24 up 0.7% at 81.44$/bbl
  • WTI SEP 24 up 0.9% at 78.6$/bbl
  • Brent OCT 24-NOV 24 up 0.04$/bbl at 0.65$/bbl
  • Brent DEC 24-DEC 25 up 0.16$/bbl at 4.08$/bbl
  • US gasoline crack down 0.1$/bbl at 24.59$/bbl
  • US ULSD crack down 0.1$/bbl at 24.38$/bbl