Crude Lower With Focus Still on Middle East

Crude markets are lower today after volatile trading late last week saw Brent swing between about 87.5$/bbl and 90.6$/bbl. Markets are watching closely for signs that the Middle East conflict is spreading outside of Israel and specifically for any involvement from Iran. The restrained start to the ground offensive into Gaza with Israel taking it one day at a time has taken pressure off prices so far today.

• Brent DEC 23 down -1.6% at 89.07$/bbl
• WTI DEC 23 down -1.8% at 83.98$/bbl
• Gasoil NOV 23 down -0.4% at 875.5$/mt
• WTI-Brent down -0.13$/bbl at -5.09$/bbl
• Signs of weak economic demand such as poor refined fuel demand figures in Europe and crude stockpile builds in the US are adding downside pressure. Last week saw stronger-than-expected data from the US ahead of the US Fed meeting on 1 November.
• Saudi Arabia may pause the increase in oil prices for customers in Asia for the first time in six months according to a Bloomberg survey.
  • Brent DEC 23-JAN 24 down -0.03$/bbl at 1.25$/bbl
  • Brent DEC 23-DEC 24 down -0.57$/bbl at 6.97$/bbl
• The near term crude call options continue to show a premium over the puts amid upside price risks while the crude curve backwardation remains strong as OPEC+ supply cuts keep the market tight this year.
• Gasoline cracks continue to edge higher but remain low after falling in August and September while diesel spreads are also falling this month amid weak fuel demand. Diesel cracks remain relatively robust compared to historical levels amid low stocks and tight supplies ahead of the winter heating season.
  • US gasoline crack up 0.2$/bbl at 11.57$/bbl
  • US ULSD crack up 0.2$/bbl at 38.89$/bbl