Crude Steady After Recent OPEC Rally

Crude steady after rally following on from OPEC+ comments earlier in the week

• Saudi Arabia indicated that OPEC+ may need to cut production to stabilize the volatile market. Reports yesterday suggested any cuts could coincide with the return of Iran to oil markets should it clinch a nuclear deal with the West.
• The potential revival of an Iranian nuclear deal is limiting the upside supply concern driven moves. The US is expected to formally respond to the Iran comments shortly.
  • Brent OCT 22 down -0.1% at 100.14$/bbl
  • WTI OCT 22 down 0% at 93.72$/bbl
  • Gasoil SEP 22 up 1.3% at 1134$/mt
  • WTI-Brent up 0.04$/bbl at -6.43$/bbl
• Crude has risen over 7$ from 92.5$/bbl since the OPEC comments on Monday and time spreads have also strengthened. The prospect of production cuts is reflected in a tighter view of the market from a steeper backwardation of the forward crude. The Brent prompt spread has risen from a low of 0.4$/bbl and the Dec22-Dec23 spread is up from 5.78$/bbl last week.
  • Brent OCT 22-NOV 22 down -0.14$/bbl at 0.91$/bbl
  • Brent DEC 22-DEC 23 up 0.05$/bbl at 9.38$/bbl
• API data last night shows a fall in crude stocks but build in products. Low inventory levels are helping support diesel spreads but significant builds would be require to bring stocks anywhere back near to normal. Demand concerns continue to weigh on the gasolines market.
  • US 321 crack up 0.3$/bbl at 36.21$/bbl
  • US gasoline crack down -0.6$/bbl at 21.03$/bbl
  • US ULSD crack up 0.7$/bbl at 66.33$/bbl