Crude Drifts After Supply Driven Rally

Threat of production cuts by OPEC and Kazakh crude export disruptions hang over the market outweighing economic growth concerns.

• Crude has drifted lower this morning after rallying strongly yesterday to the highest close since the end of July.
  • Brent OCT 22 down -0.6% at 104.48$/bbl
  • WTI OCT 22 down -0.1% at 96.89$/bbl
  • Gasoil SEP 22 down -0.5% at 1180.25$/mt
  • WTI-Brent up 0.38$/bbl at -7.59$/bbl
• Prices are also supported by clashes between militias in Libya, the storming of Iraq’s Republican Palace and drawn out discussions regarding the revival of an Iran nuclear deal, all of which have the potential to reduce future output expectations.
• The supply concerns have also supported time spreads with the Dec22-Dec23 rallying to the highest since early July.
  • Brent OCT 22-NOV 22 down -0.26$/bbl at 1.9$/bbl
  • Brent DEC 22-DEC 23 down -0.18$/bbl at 12.2$/bbl
• Diesel and gasoline cracks fell yesterday but diesel is rallying this morning. BP’s Whiting 435kbpd refinery expects to have all units restarted by Saturday after a halt to production due to an electrical fire on Aug 24.
  • US 321 crack up 0.2$/bbl at 33.45$/bbl
  • US gasoline crack down -0.3$/bbl at 16.8$/bbl
  • US ULSD crack up 1.2$/bbl at 66.57$/bbl