Crude Edges Up After Sharp Demand Driven Selloff Yesterday

Crude is edging back up slightly from the previous close after seeing a sharp fall yesterday amid signs that Russia may start to ease its fuel export ban soon and with EIA data showing weak gasoline demand. Wider economic concerns and possible future interest rate rises started the decline earlier in the day ahead of the US payrolls data tomorrow.

• Brent DEC 23 up 0.6% at 86.3$/bbl
• WTI NOV 23 up 0.5% at 84.65$/bbl
• Gasoil OCT 23 down -3.2% at 889.5$/mt
• WTI-Brent down -0.02$/bbl at -3.33$/bbl
• The fall in crude through technical support levels came despite OPEC yesterday leaving production cuts for this year unchanged. JMMC as expected did not recommend any policy changes while Saudi Arabia and Russia reaffirmed the planned cuts through to year end although will review next month.
• EIA inventory data yesterday showed a slightly larger than expected draw in crude stocks but gasoline demand fell to the lowest since mid-February and the lowest for this time of year since 1997. Cushing stocks remain low but showed the first build since the start of August.
  • Brent DEC 23-JAN 24 down -0.03$/bbl at 1.59$/bbl
  • Brent DEC 23-DEC 24 up 0.02$/bbl at 7.61$/bbl
• Despite the flat price sell off crude backwardation remains strong reflecting the ongoing tight global supplies with just a small pull back in both the prompt and Dec23-Dec24 spreads yesterday.
• RBOB fell to the lowest since December as gasoline cracks extended the declining trend driven by the weak US demand data suggesting high domestic pump prices are weighing on demand after the end of the peak summer driving season. Diesel cracks also fell on signs Russia could partially lift its diesel ban in the coming days by possibly allowing pipeline exports subject to quotas.
  • US 321 crack down -0.5$/bbl at 19.07$/bbl
  • US gasoline crack up 0$/bbl at 8.04$/bbl
  • US ULSD crack down -1.4$/bbl at 41.11$/bbl