Mid-Day Oil Summary: Crude Edges Higher

Markets are closely watching tensions in the Middle East amid risk of an escalation in the conflict as Israel makes plans for a ground offensive into Gaza. Involvement from Iran is the main risk to oil markets from any reduction in output or if it retaliates to a tightening of sanctions by blocking the Strait of Hormuz. President Biden is due to visit Israel and Jordan on Wednesday amid US efforts to contain the conflict.

• Brent DEC 23 up 0.3% at 89.92$/bbl
• WTI NOV 23 up 0.1% at 86.77$/bbl
• Gasoil NOV 23 down -1.6% at 911.25$/mt
• WTI-Brent down -0.05$/bbl at -4.51$/bbl
• The Nov23 WTI options expire against the 19:30BST futures close price today with the main open positions at 85$/bbl, 88$/bbl and 90$/bbl. A total of 578kbbls of open November 23 options positions on CME and ICE are due to expire against the November future close today. Current aggregate open interest is 309k calls and 268k puts.
• The API oil inventory data is due for release today at 16:30 ET.
• Venezuela will resume talks with US officials today in Barbados in a move that will potentially ease sanctions on its oil. Both governments agreed to a deal to ease US sanctions on Venezuela oil in exchange for competitive and international monitored presidential elections next year.
• Chinese President Xi is hosting the 3rd Belt and Road Forum in Beijing on Tuesday with about 140 nations in attendance, including Russian President Vladimir Putin.
• Saudi Aramco’s CEO Amin Nasser said that global oil demand for H2 2023 is likely to be 103m b/d with global spare capacity at 3m b/d.
• Oil output in the major US shale oil basins is forecast to fall by 50kbd in November to 9.553mb/d according to the EIA Drilling Productivity Report yesterday.
• Russian seaborne crude shipments last week rose again to 3.51mbpd as of 15 October, up by 285kbpd from the prior, Bloomberg tanker-tracking data showed. The four-week average rose to 3.36mbpd.
• Russian seaborne diesel exports fell by 20% to about 1.1 million metric tons in the first 15 days of October vs the same period September according to LSEG.
• Pemex shut a 270,000 bpd CDU at its Deer Park refinery, Texas on Monday because of a damaged process line.
• US gasoline cracks rebounded from its lowest since 2020 at 7.1$/bbl with recent GasBuddy data suggesting some demand support amid falling pump prices. Diesel spreads have eased back after a rally late last week with tight supplies and low inventories weighed against economic driven demand uncertainty.
  • US gasoline crack up 0.1$/bbl at 9.15$/bbl
  • US ULSD crack down -0.2$/bbl at 45.31$/bbl