August 23, 2024 11:22 GMT
Mid-Day Oil Summary: Crude Down 2% on Week
OIL
Crude is rising today but remains on track for a net weekly loss of around 2%. Global demand concerns and an easing Middle East risk premium offset growing speculation of a delay to OPEC+ cut unwinding.
- Brent OCT 24 up 1.2% at 78.11$/bbl
- WTI OCT 24 up 1.3% at 73.95$/bbl
- US and Israeli negotiators started new talks in Cairo on Thursday and will continue into the weekend to negotiate with Hamas to find common ground.
- Softness in manufacturing and jobs data suggest a slowing US economy to add to suggestions of a struggling economy in China and slowing oil demand from refiners.
- Fed Chair Powell is expected to address the Jackson Hole Symposium as the market watches for further signals with a US Fed rate cut widely expected at the September meeting.
- The crude call-put option skews are holding a small skew to the puts over calls after a switch back to a downside bias at the start of this week. The bearish move is driven by easing Middle East risk sentiment and concern for a market surplus heading into next year.
- Arbitrage flows of Canadian heavy crude to China continue with the Kearl Lake Blend making its return for the first time since 2018, Platts said.
- India’s crude oil imports in July fell by 0.7% year on year to 19.4m mt but were up compared to 18.8m mt in June.
- Morgan Stanley cut the Brent crude price forecast for Q4 2024 and into 2025 with a switch to a market surplus, Bloomberg said.
- The oil market is likely to flip into a surplus as early as Q4, followed by a significant oversupply in 2025 if OPEC+ proceeds with unwinding cuts as planned, Bloomberg Intelligence said.
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