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Crude Weakness Resumes After Small Recover Late Last Week


Crude is weaker this morning after seeing small gains on Friday and after a three week decline from a peak on Oct 20. Front month Brent reached a low of 80.6$/bbl earlier today but remains above the low of 79.2$/bbl from last week. A bearish demand outlook in the US and China and Europe is weighing on prices while supply concerns linked to the conflict in the Middle East have eased recently and supply is stronger than expected despite OPEC+ cuts.

    • Brent JAN 24 down -0.8% at 80.75$/bbl
    • WTI DEC 23 down -0.9% at 76.47$/bbl
    • Gasoil DEC 23 down -0.9% at 784.75$/mt
    • WTI-Brent up 0.03$/bbl at -4.28$/bbl
  • Oil market reports are likely to be in focus this week looking for indications of future demand, non-OPEC supply growth and OPEC supply for next year. The monthly OPEC report is due today, the IEA tomorrow and two week’s worth of US inventory data are due on Wednesday.
  • Goldman Sachs has cut its Brent forecast for 2024 to 92$/bbl from 98$/bbl due to stronger supply but expects demand growth to remain robust at 1.6mbpd in 2024 according to Bloomberg.
    • Brent JAN 24-FEB 24 down -0.04$/bbl at 0.26$/bbl
    • Brent JUN 24-DEC 24 down -0.05$/bbl at 1.82$/bbl
  • The WTI front 1-2 month spread is holding near parity after last week falling into contango for the first time since early July amid weak prompt demand, record US output and recovering Cushing stocks.
  • Gasoline cracks eased back lower on Friday after seeing a slow recovery over the last month while diesel cracks saw a net loss in the week amid slow trucking demand in the US and a decline in industrial and economic activity in Europe.
    • US gasoline crack down -0.3$/bbl at 14.28$/bbl
    • US ULSD crack up 0.1$/bbl at 38.13$/bbl

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