Crude Edges Higher As Supply Risks Offset Large US Stock Build

Crude markets are edging higher after a slight pull back mid-week as the market assess the risks to Iran supplies from Middle East tensions against uncertainty over central bank policy after slightly higher US CPI and surprisingly strong core CPI.

• Brent DEC 23 up 1% at 86.9$/bbl
• WTI NOV 23 up 1.2% at 83.93$/bbl
• Gasoil NOV 23 up 1.1% at 894$/mt
• WTI-Brent down -0.1$/bbl at -4.15$/bbl
• Russia’s Deputy PM Alexander Novak said that the oil market balance between demand and supply is fragile. The IEA monthly oil report yesterday suggested an upward revision for this year’s oil demand forecast but OPEC MOMR kept the global oil-demand growth forecast steady amid declining inventories and supply deficit this quarter.
• Crude saw some downward pressure after EIA oil inventory data showed a bigger than expected build in crude stocks rising the most since February driven by a large decline in crude exports and production rising to a record high of 13.2mbpd. Cushing stocks however fell again as expected to the lowest since July 2022.
• China September trade data showed oil imports down in the month, but still remain 14% higher in y/y terms.
  • Brent DEC 23-JAN 24 up 0.07$/bbl at 1.26$/bbl
  • Brent DEC 23-DEC 24 up 0.41$/bbl at 6.67$/bbl
• Crude backwardation also strengthened again yesterday with both near term and longer dated spreads recovering some of the losses from 11 Oct.
• Diesel cracks have rallied following a larger than expected draw in US distillate stocks while gasoline cracks remain steady after a small rise in US demand on the week. US gasoline and distillates inventories both drew with an increase in export volumes.
  • US gasoline crack up 0.1$/bbl at 8.23$/bbl
  • US ULSD crack up 0.2$/bbl at 44.63$/bbl