Reality check

ICE Brent prompt contract collapsed to 66.6 $/b as the dollar strengthened, while prompt time spreads remained subdued at 15 cents, reflecting a balanced spot equilibrium. Iranian talks for rejoining the JCPOA appeared to be promising according to European diplomatic officials, while Indian refiners suggested that they were keen to make room for Iranian barrels within their crude slate as soon as sanctions were lifted. Yesterday’s EIA weekly report showed that despite constant refining runs in the US, product stocks declined by 2 mb and 2.6 mb for gasoline and diesel stocks. Crude oil stocks built by 1.3 mb, while overall stocks including the SPR release actually declined.