The September Brent futures contract witnessed a bout of strength this morning and rallied into the $86/bbl territory, hitting $86.25/bbl at 09:00 BST, but has since come off to $86.05/bbl as of 11:20 BST (time of writing). Market confidence was likely boosted following Thursday’s CPI decline. However, US Fed Chair Jerome Powell has reportedly stated that more data was needed to support the case for an interest rate cut. In addition, EIA data out this week showcased that US gasoline demand moved up to 9.4mb/d in the week ending 05 June, its highest since 2019 for the week, including the 4th of July holiday. Russia’s Federal Antimonopoly Agency (FAS) plans to reinstate a gasoline export ban from Aug 01 in an attempt to maintain price stability and meet fuel demand during harvesting season. Finally, a more interesting reflection of this morning’s strength has been the front-month Brent futures spread, which, at the time of writing, sits in a comfortable backwardation of $1.10/bbl, while the six-month futures spread currently trades at $4.40/bbl, potentially highlighting a rise in refinery demand for crude during the summer season.
