Crude Pulls Back with the Strong Dollar Weighed Against Possible OPEC Cuts

Crude has pulled back as the dollar strengthens and economic concerns are weighed against the possibility of a cut to OPEC production.

• Brent NOV 22 down -1.6% at 84.92$/bbl
• WTI NOV 22 down -1.6% at 77.23$/bbl
• Gasoil OCT 22 down -2.1% at 946.5$/mt
• WTI-Brent up 0.06$/bbl at -7.69$/bbl
• Yesterday crude rallied on reports that Russia is likely to propose a 1mbpd cut in OPEC+ output at their next meeting on Oct 5. Growing calls for an OPEC production cut and hurricane disruption to US production provided support to crude. Hurricane Ian shut in at least 480kbpd of production in the Gulf of Mexico.
  • Brent NOV 22-DEC 22 down -0.05$/bbl at 1.35$/bbl
  • Brent DEC 22-JAN 23 up 0.02$/bbl at 1.78$/bbl
  • Brent DEC 22-DEC 23 down -0.31$/bbl at 9.54$/bbl
• Time spreads also traded higher yesterday in reaction to possible OPEC cuts with the Brent 2-3 spread reaching the highest since late August. The Brent Dec22-Dec23 spread recovered much of the losses driven by economic demand concerns from the end of last week before easing back slightly today.
  • US 321 crack down -0.1$/bbl at 32.11$/bbl
  • US gasoline crack up 0.2$/bbl at 21.33$/bbl
  • US ULSD crack down -0.7$/bbl at 53.52$/bbl
• Diesel cracks are following the crude moves lower on the strong US dollar ahead of the EIA stocks data due later today. The API data last night showed a build in crude and diesel stocks and a draw in gasoline. Diesel demand in Florida soared ahead of the arrival of hurricane Ian. Unplanned refinery shutdowns and scheduled maintenance are adding to existing low stock levels to support gasoline cracks.