October WTI crude oil (CLV25) today is up +0.53 (+0.85%), and October RBOB gasoline (RBV25) is up +0.0239 (+1.20%).
Crude oil and gasoline prices are moving higher today, with gasoline posting a 1-week high. Today’s weaker dollar is supportive for energy prices. Also, concerns over a decline in Russian oil exports are boosting prices after Ukraine stepped up its drone attacks on Russian refineries. In addition, today’s rally in the S&P 500 to a new record high shows confidence in the economic outlook and is supportive of energy demand and crude prices. Gains in crude are limited after today’s weaker than expected US and Chinese economic news signal weakness in energy demand.
Ukraine has stepped up its attacks on Russian refineries and oil infrastructure, which is bullish for crude prices as it curbs Russian crude exports and tightens global oil supplies. The Kirishi refinery, one of Russia’s biggest refineries that has an annual processing capacity of over 20 million tons, has halted crude processing after damage caused by a Ukrainian drone attack on Sunday. Also, Ukrainian drone attacks have damaged Russian oil infrastructure and crude-exporting hubs along Russia’s Baltic Coast. Ukrainian drone and missile attacks on Russian refineries have curbed Russia’s crude-processing runs to 5.09 million bpd in the first 27 days of August, the lowest monthly average in over 3.25 years.
Today’s weaker-than-expected global economic news is bearish for energy demand and crude prices. The US Sep Empire manufacturing survey of general business conditions fell -20.6 to a three month low of -8.7, weaker than expectations of 5.0. Also, China Aug industrial production rose +5.2% y/y, weaker than expectations of +5.6% y/y. In addition, the China Aug surveyed jobless rate unexpectedly rose +0.1 to a 6-month high of 5.3%, showing a weaker labor market than expectations of no change at 5.2%.
A decrease in crude oil held worldwide on tankers is bullish for oil prices. Vortexa reported today that crude oil stored on tankers that have been stationary for at least seven days fell by -7.2% w/w to 67.96 million bbl in the week ended September 12.
Crude prices have support on concerns that the ongoing war in Ukraine could lead to additional sanctions on Russian energy exports, reducing global oil supplies. President Trump said last Friday that his patience with Russian President Putin was “running out fast” for continuing the war in Ukraine, and he threatened new economic sanctions against Russia. The US proposed that the Group of Seven allies impose tariffs as high as 100% on China and India for their purchases of Russian oil in an effort to convince Russia to end the war in Ukraine.
