Mid-Day Oil Summary: Crude Edges Higher

Crude is edging slightly higher today but the front month remains on track for a net decline on the week with the Israel conflict still contained and with demand uncertainty weighing on prices. Focus is now on the US payrolls later today and updated China trade date next week.

• Brent JAN 24 up 0.5% at 87.32$/bbl
• WTI DEC 23 up 0.8% at 83.08$/bbl
• Gasoil NOV 23 up 0.5% at 914.25$/mt
• WTI-Brent up 0.09$/bbl at -4.62$/bbl
• Concern for soft global demand is helping limited upside moves after disappointing China PMI data this week although the US Fed suggested a more dovish tone after as expected keeping rate unchanged this week.
• US nonfarm payrolls are due for release at 08:30 ET as the markets look for signs of future US Fed policy.
• Global crude oil markets are expected to be balanced through Q4 2023 with the Israel war risk fading and with slower demand growth according to JPMorgan. The bank maintains a Brent forecast to average 85$/bbl in Q4 with the year end at 86$/bbl and an average of 83$/bbl in 2024.
• Oil and gas rig counts globally rose to 1,777 in October, up 17 on the month, according to Baker Hughes.
• Reuters headlines from the Russian Energy Ministry confirm earlier comments by Novak that the 300,000 bpd export cuts as part of the voluntary OPEC+ commitment include both oil and oil products.
• Russia has no plans to further ease fuel export restrictions in the near future according to Deputy Prime Minister Alexander Novak – quoted by Russian news agency Ria.
• Russian seaborne crude oil exports rose to 3.53mbpd in October, the highest level in four month and up by 7.4% from September levels according to tanker-tracking data from S&P.
• China’s independent refineries will have to cut runs further in November because of limited crude import quotas – a trend expected to continue until import quotas are issues for 2024 according to Platts sources.
• Construction on the Canadian Trans Mountain oil pipeline expansion was ordered to stop Thursday by the Canada Energy Regulator due to environmental and safety non-compliances.
• Diesel cracks are regaining ground this week to reverse much of the decline seen during the second half of October amid tight supply concerns and low inventories heading into the winter heating season. Gasoline cracks remain stable with ongoing concern for weak demand.
  • US gasoline crack down -0.3$/bbl at 11.38$/bbl
  • US ULSD crack up 0.6$/bbl at 44.73$/bbl
• Seaborne diesel and gasoil exports from Russian ports fell 11% m/m in October to 2.55mn tons according to LSEG data.
• China’s state-owned refinery run rates in the week to 3 Nov fell to the lowest since 6 July at 78.53% of capacity according to Bloomberg based on OilChem data.