Crude Falls on Stronger USD and Interest Rate Concern

Brent has traded back below 90$/bbl and the lowest since 8 Sep with pressure from the renewed strength of the US dollar and concerns that demand growth could be limited by major central banks keeping interest rates higher for longer. Crude markets have puled back from a Brent front month peak of 97.6$/bbl on 28 Sep driven by the widely expected market deficit in Q4 amid tight supplies and inventories drawdowns.

• Brent DEC 23 down -0.7% at 90.09$/bbl
• WTI NOV 23 down -0.5% at 88.37$/bbl
• Gasoil OCT 23 up 0.4% at 974$/mt
• WTI-Brent up 0.1$/bbl at -3.36$/bbl
• The Iraq/Turkey pipeline is unable to restart until commercial and financial issues have been resolved according to a senior Iraqi official yesterday. It follows earlier reports by Turkish Energy Minister Alparslan Bayraktar that the pipeline could begin flows again this week.
• OPEC crude output rose for a second straight month in September according to a Reuters survey, pushed higher by Nigerian and Iranian exports. The latest JMMC monitoring committee meeting is due to take place tomorrow, but expectation is for no changes in policy.
  • Brent DEC 23-JAN 24 down -0.13$/bbl at 1.52$/bbl
  • Brent DEC 23-DEC 24 down -0.51$/bbl at 8.06$/bbl
• Time spreads are also slightly softer today but have seen more support than the flat price. WTI-Brent is up around -3.35$/bbl with support from declining Cushing stocks with the updated API inventories due out later today.
• Diesel cracks are weighing the impact of the Russian fuel export ban against recent high Asian exports and ongoing economic demand concerns while global inventories remain below normal. Gasoline cracks are steady today after trending lower since mid September on weak demand and building stocks after the end of the peak summer season.
  • US gasoline crack down -0.1$/bbl at 12.6$/bbl
  • US ULSD crack down -0.1$/bbl at 46.64$/bbl