News

1) First up, Saudi Arabia has cut its official selling price (OSP) for Arab Light into Asia for September by the biggest amount in nearly a year. The Kingdom has lowered its OSP to a $1.10/bbl discount versus Oman-Dubai; while some will interpret this as a signal of Saudi rolling up its sleeves to battle for market share, it is more likely that the price discount is a response to lower impending Asian demand as refiners dial back on runs.

As our ClipperData illustrates in the chart below, Saudi has accounted for some 16 percent of waterborne crude deliveries into China this year through June. This number has been inflated by February imports at their highest since at least 2013; nonetheless, Saudi’s share of waterborne flows to China is below that seen last year, as the battle for market share rages on.

2) The latest CFTC data show that speculators increased their shorts (aka bearish bets) by the biggest volume on record in last week’s data for WTI crude. This is the biggest increase since data began back in 2006, dragging the net long position in WTI to its lowest since February.

Another bearish development from the CFTC data has been gasoline positioning. Speculative positions in gasoline have moved to a record net short position as hedge funds bet on an ongoing gasoline supply glut.

3) As Indian domestic oil production (see below) continues to edge lower as demand continues to increase, it has boosted ...