Crude Stable With Demand Concern Balancing OPEC+ Cuts

Crude is steady today after trading in a narrow 83.8$/bbl to 84.6$/bbl range yesterday with tight supplies from OPEC + cuts eased by higher Iranian output and with China and US demand concerns hanging over the market.

• Brent OCT 23 down -0.2% at 83.88$/bbl
• WTI OCT 23 down -0.1% at 79.56$/bbl
• Gasoil SEP 23 down -0.4% at 910.75$/mt
• WTI-Brent down -0.05$/bbl at -4.33$/bbl
• Upside is limited by concern for inflation and the impact on a potential extension to the US rate tightening cycle. Friday’s Jackson Hole speech by Fed Chairman Powell may shed some light on the chance on further rate hikes.
• Iraq has not reached an agreement with Turkey to allow an immediate resumption of oil exports via the Turkish port of Ceyhan. Turkish and Iraqi energy ministers today emphasized the importance of resuming oil flow after repairs.
  • Brent OCT 23-NOV 23 down -0.02$/bbl at 0.32$/bbl
  • Brent DEC 23-DEC 24 down -0.08$/bbl at 3.82$/bbl
• Crude backwardation has flattened slightly so far this week as crude time spreads continue to fall reflecting an easing of the tight market concerns although a market deficit is still expected in H2 2023. The Dec23-Dec24 Brent spread is down from over 5.5$/bbl on 10 Aug to 3.85$/bbl today.
  • US gasoline crack down -8.2$/bbl at 27.83$/bbl
  • US ULSD crack down -0.6$/bbl at 50.98$/bbl
• US gasoline prices have eased back in recent days to the lowest in two weeks with limited disruption despite extreme heat on the US Gulf Coast and a West Coast hurricane. Diesel margins remain strong with concern for with low distillates supplies before the peak winter consumption. API data last night showed another small draw in distillates stocks although showed a build in gasoline inventories.