Crude Steadies Amid Supply Risks From Middle East Conflict

Front month crude edges lower after nearly a 5$/bbl rally on Friday driven by concern for an escalation of the Israel conflict in the Middle East. Tight supplies from OPEC+ cuts including Saudi Arabia voluntary reductions until the end of the year are also supporting prices and offsetting economic driven demand uncertainty.

• Brent DEC 23 down -0.3% at 90.65$/bbl
• WTI NOV 23 down -0.2% at 87.48$/bbl
• Gasoil NOV 23 up 1.2% at 938.75$/mt
• WTI-Brent up 0.07$/bbl at -4.5$/bbl
• US has been talking with other countries in the region in an attempt to prevent the Israel-Hamas conflict spreading according to Bloomberg. Any escalation could impact oil supplies from the region with crude from Iran at risk from tighter US sanctions after seeing a significant increase in output so far this year. A trip by US President Biden to Israel is being explored.
  • Brent DEC 23-JAN 24 down -0.02$/bbl at 1.53$/bbl
  • Brent DEC 23-DEC 24 down -0.08$/bbl at 8.12$/bbl
• Crude curve backwardation strengthened late last week in line with the flat price move with both the Brent prompt time spread and Dec23-Dec24 spread regaining most of the losses seen midweek after reports that US intelligence suggested a lack of Iranian knowledge in the Israel attacks earlier in the week.
• Diesel spreads are following the gains seen in the crude markets amid tight supply risks heading in the winter heating season. US gasoline cracks are steady near the lowest since 2020 driven by ongoing concern for weak demand.
  • Brent DEC 23-JAN 24 down -0.02$/bbl at 1.53$/bbl
  • Brent DEC 23-DEC 24 down -0.08$/bbl at 8.12$/bbl