Crude Holds Steady After Gains Last Week on Tight Supplies

Crude markets are holding steady today after a strong rally late last week on falling Saudi Arabian crude exports, and expectations that Russia and Saudi Arabia will continue output cuts into October.

• Brent NOV 23 down -0.1% at 88.42$/bbl
• WTI OCT 23 down -0.1% at 85.47$/bbl
• Gasoil SEP 23 down -0.2% at 915$/mt
• WTI-Brent down -0.03$/bbl at -3.77$/bbl
• Last week Russia announced it has agreed on further actions with OPEC+ and will announce the steps this week while Saudi Arabia is expected to extend the existing 1mbpd production cuts.
• Hopes that the US Fed has finished tightening and China efforts to stimulate the economy are also providing support with any positive impact on demand adding to the tight market supplies.
• Trading volume is likely to be thinner today due to the US holiday.
  • Brent NOV 23-DEC 23 up 0.01$/bbl at 0.76$/bbl
  • Brent DEC 23-DEC 24 down -0.1$/bbl at 6.05$/bbl
• Crude curve backwardation has strengthened over the last week to reflect the tight market expectations. Brent Nov-Dec spread last week surged to the highest since June 2022 and the Dec23-Dec24 spread is the highest for over a year.
• Diesel and gasoline cracks spreads eased lower last week with diesel back to levels seen in early August. Easing fears for near term refinery disruptions are weighed with ongoing low global inventories as we approach the winter season. China has issued 15m tons of oil products export quotas to companies in its third batch for 2023, consisting of 12m tons of refined products quotas.
  • US gasoline crack down 0$/bbl at 23.2$/bbl
  • US ULSD crack up 0.1$/bbl at 45.06$/bbl