Crude Steady Awaiting Oct Production Target From Saudi Arabia

Crude markets are holding near the highest since November awaiting details of Saudi Arabia and Russia plans for October output expected this week. Front month Brent has rallied from about 82.4$/bbl on 24 Aug up to a high of nearly 89.2$/bbl yesterday. Hopes that the US Fed has finished tightening and China efforts to stimulate the economy are also providing support.

• Brent NOV 23 down -0.3% at 88.72$/bbl
• WTI OCT 23 up 0.2% at 85.75$/bbl
• Gasoil SEP 23 up 0.5% at 927.75$/mt
• WTI-Brent up 0.07$/bbl at -3.76$/bbl
• Russia last week announced it has agreed on further actions with OPEC+ and will announce the steps this week while Saudi Arabia is expected to extend the existing 1mbpd production cuts. Previous monthly announcement by Saudi Arabia have taken place early in the month.
• Goldman Sachs has said that the OPEC+ reductions have resulted in a 2.3mbd shortfall in Q3 and they no longer expect a partial unwind of the voluntary 1mbpd Saudi production cuts.
  • Brent NOV 23-DEC 23 down -0.04$/bbl at 0.71$/bbl
  • Brent DEC 23-DEC 24 down -0.13$/bbl at 5.95$/bbl
• Crude curve backwardation remains strong reflecting the tight market expectations. Brent Nov-Dec spread last week surged to the highest since June 2022 and the Dec23-Dec24 spread is the highest for over a year.

• Gasoline and diesel spreads are seeing some support this week after gradually drifting lower over the previous week. Production of refined products in China reached a record high in August and has issued 12m tons of refined products quotas in its third batch for 2023. Diesel Exports from Russia’s Primorsk dropped in August, but remained well above the seasonal average.
  • US gasoline crack up 0.5$/bbl at 23.74$/bbl
  • US ULSD crack up 0.1$/bbl at 46.07$/bbl