Crude Resume Rally After EIA Stock Draws

Crude markets extend gains after a below expected crude draw and another drop in Cushing stocks in EIA data yesterday adding to existing tight supply concerns as crude resumes the rally towards 100$/bbl.

• Brent NOV 23 up 0.7% at 97.22$/bbl
• WTI NOV 23 up 0.8% at 94.44$/bbl
• Gasoil OCT 23 up 1.7% at 987.75$/mt
• WTI-Brent up 0.02$/bbl at -2.78$/bbl
• Tight supplies and inventory drawdowns due to OPEC+ production cuts are providing upside pressure and supported by an expected demand boost from the upcoming Golden Week in China. Upside has been limited by a stronger US dollar and concern for the impact on demand from future central bank policy.
• Crude inventories at Cushing fell for the seventh week with a draw of 943k this week taking stocks to the lowest since July 2022 at 21.96mbbls and close to operational low, below which oil is difficult to remove.
  • Brent NOV 23-DEC 23 up 0.14$/bbl at 2.33$/bbl
  • Brent DEC 23-DEC 24 up 0.47$/bbl at 11.22$/bbl
• The low stocks are supporting WTI with the WTI-Brent rallying to a high of -2.65$/bbl overnight while crude backwardation also strengthened. The prompt time spreads surged again taking WTI up to 2.55$/bbl and Brent up to 2.33$/bbl ahead of the Brent Nov contract expiry tomorrow.
• Gasoline cracks have fallen with further weakness in demand driving an unexpected stock build in EIA data yesterday. Diesel cracks recovered from a low earlier in the day yesterday with a boost to demand while inventories remain low despite the small build this week while supply is squeezed by Russia’s export ban.
  • US gasoline crack down -0.2$/bbl at 13.15$/bbl
  • US ULSD crack up 0$/bbl at 43.17$/bbl