Crude Holding Steady After OPEC+ Cut and EIA Stock Draw

Crude holding gains from yesterday after OPEC+ cut production by 2mbpd for November and December, the maximum expected ahead of the meeting.

The group decided to implement a cut to stabilise the market against a backdrop of falling demand due to economic concerns and to encourage investment with limited spare capacity. The Saudi Minister stated their commitment to be proactive and pre-emptive in a market of very high uncertainty. The real cut is likely to be around 1 to 1.1mbpd due to OPEC+ member underproduction.

• Brent DEC 22 down -0.2% at 93.22$/bbl
• WTI NOV 22 down -0.2% at 87.56$/bbl
• Gasoil OCT 22 down -1.4% at 1165.5$/mt
• WTI-Brent down -0.01$/bbl at -6.58$/bbl
• EIA data provided support after the inventories showed an unexpected draw in crude stocks due to a rebound in refinery utilisation. Support also came after a reiteration from Russia that they will not supply fuel to any countries that implement a price cap.
• Crude time spreads remain stable with the curve still in strong backwardation on the future supply concerns.
  • Brent DEC 22-JAN 23 up 0.02$/bbl at 1.78$/bbl
  • Brent DEC 22-DEC 23 down -0.09$/bbl at 11.94$/bbl
• Gasoline and distillate stocks both showed large draws. Low stocks and uncertainty over global supplies are supporting diesel cracks while gasoline cracks are slightly softer with higher stock levels after weak demand throughout the summer driving season. Gasoline and diesel implied demand continue to rebound with 4-week rolling average product supplied data back above 2020 levels.
  • US 321 crack down -0.5$/bbl at 37.85$/bbl
  • US gasoline crack down -0.8$/bbl at 23.49$/bbl
  • US ULSD crack down -0.7$/bbl at 66.75$/bbl