Mid-Day Oil Summary: Crude Edges Up Ahead of Payrolls

Crude markets are edging higher after prices struggled to find a clear direction today ahead of the updated US payrolls data that is due later. Crude markets are on track for a weekly decline driven by economic concerns and possible future interest rate rises.

• Brent DEC 23 up 0.3% at 84.34$/bbl
• WTI NOV 23 up 0.4% at 82.61$/bbl
• WTI-Brent up 0.03$/bbl at -3.17$/bbl
• The aggregate open interest across all ICE Brent options has increased compared to this time last month with calls interest up to 1.462m and put contracts at 1.164m.
• US nonfarm payrolls are due for release at 08:30 ET (13:30BST).
• The current selloff in crude oil futures is overdone, as prices fell too far too quickly, Barclays analyst Amarpreet Singh said in a note.
• Rystad forecast peak oil prices at 91$/bbl next year before dropping the next three to four years to as much as $50 primarily due to ample supply.
• Chinese refiners may continue to boost exports in October, as the remaining quotas for Q4 are estimated at above 10mt according to Vortexa.
• Diesel markets are trading slightly lower again today to extend the weekly decline amid an easing of the Russian fuel export ban. The ban on Russian pipeline diesel exports via ports, which accounts for the majority of the exported diesel volumes, will be lifted immediately. Russia has imposed a prohibitive fuel duty for gray exporters at 50k rubles a ton and companies must supply no less than 50% of diesel to the local market.
• The US front month diesel crack has fallen from about 48.9$/bbl on 2 Sep to about 38$/bbl today. Gasoil time spread also continue to fall as backwardation softens. The prompt time spread is the lowest since 7 Sep and Dec23-Dec24 spread down to the lowest since 27 July. Low global stocks however remain supportive amid seasonal refinery maintenance and a recent recovery in US distillates demand.
• A fire at the H2 compressor system at the Valero Corpus Christi West refinery has been contained according to a Texas Commission on Environmental Quality filing.
• Gasoil OCT 23 down -0.9% at 860.25$/mt
• ULSD NOV 23 up 1.1% at 2.9$/gal
• Gasoil OCT 23-NOV 23 down -1.75$/mt at 19.75$/mt
• Gasoil DEC 23-DEC 24 down -3.75$/mt at 71.25$/mt
• EU Gasoil-Brent up 0.7$/bbl at 25.61$/bbl
• US ULSD crack up 0.9$/bbl at 39.26$/bbl