Crude Lower on Declining Risk Sentiment but with Upside Risks from OPEC+

Brent crude is edging back up after reaching a low of 79.76$/bbl earlier today amid weaker risk appetite as market focus remains on Thursday’s delayed OPEC+ meeting. Softer-than-expected industrial profits in China pointed to struggling demand to weigh on commodities.

• Brent JAN 24 down -0.5% at 80.16$/bbl
• WTI JAN 24 down -0.6% at 75.08$/bbl
• Gasoil DEC 23 down -2.3% at 814.25$/mt
• WTI-Brent down -0.04$/bbl at -5.08$/bbl
• OPEC+ was previously reported to be nearing a deal with African nations surrounding a dispute over reduced 2024 production. The disagreement on production quotas led to a delay in the OPEC+ ministerial meeting from Sunday to Thursday. Saudi Arabia and Russia are still widely expected to extend output cuts into next year although a Bloomberg survey showed about half of analysts expect measures to reduce supply further.
• Shipping risks in the Middle East remain high with reports of a chemical tanker being boarded by Houthi rebels yesterday.
• Oil loadings at the Black Sea CPC terminal have been temporarily halted due to a storm alert and accepting reduced crude flows due to near full storage.
• China has issued an additional 3m tonnes of fuel oil imports quotas for non state firms according to the Ministry of Commerce.
  • Brent JAN 24-FEB 24 up 0.01$/bbl at 0.11$/bbl
  • Brent JUN 24-DEC 24 down -0.08$/bbl at 1.75$/bbl
• Near term crude time spreads remain weak with the Brent prompt in narrow backwardation and WTI in contango suggesting a looser near term balance. Longer dated spreads are drifting lower in line with the moves in front month futures.
• Diesel crack spreads are holding steady but gasoline cracks drifting lower slightly after seeing some support this month amid a slight recovery in gasoline demand and with diesel still sensitive to supply disruption amid low inventory levels.
  • EU Gasoline-Brent up 0$/bbl at 8$/bbl
  • EU Gasoil-Brent up 0.3$/bbl at 26.77$/bbl