Mid-Day Oil Summary: Crude Falls

Crude prices are trading lower today, although recouped some of the earlier losses, as markets continue to watch closely for signs that the Middle East conflict is spreading outside of Israel and specifically for any involvement from Iran. The restrained start to the ground offensive into Gaza with Israel taking it one day at a time has taken pressure off prices so far today.

• Brent DEC 23 down -1% at 89.55$/bbl
• WTI DEC 23 down -1.3% at 84.46$/bbl
• Gasoil NOV 23 up 0.2% at 880.75$/mt
• WTI-Brent down -0.13$/bbl at -5.09$/bbl
• Crude managed money net long positions for both Brent and WTI edged lower last week according to Commitments of Traders data released on Friday. The combined net long positions for Brent and WTI fell by -13k to 391k.
• Saudi’s defense Minister Khalid bin Salman is set to visit Washington Monday to meet with senior Biden officials – as the Israel/Hamas war threatens to spill over into a wider conflict, a key factor driving oil in October.
• Saudi Arabia may pause the increase in oil prices for customers in Asia for the first time in six months according to a Bloomberg survey.
• Iran has overtaken Saudi as China’s top seaborne oil supplier in October according to Kpler. Russia remains top when including pipeline. Arrivals of Iranian crude have averaged >1.8 mn bpd, a new record according to Kpler figures.
• Crude floating storage stationery for seven-days rose to 74.69mn bbls at of October 27 according to Vortexa figures, 5.8% higher than the week prior.
• Nigeria is planning to reopen its Kaduna refinery in Q4 2024, after being shut since 2018, according to Reuters citing a junior petroleum minister.
• Imports of crude oil into Shandong’s independent refineries totalled 2.09m mt in the week to Oct. 29, according to OilChem.
• China’s crude throughput is set to decline this month and for the rest of this quarter due to maintenance, softer domestic demand, narrowing oil product exports access and feedstock shortage, traders and analysts told S&P Commodity Insights.
• Chinese state-owned refiner margins are close to breakeven levels – while teapots are marginal after a run-up in futures prices and lackluster demand according to OilChem.
• High-sulfur fuel oil margins for Asian refiners are at risk of further downside after the US eased sanctions on Venezuelan oil according to FGE.
• Russian fuel prices at domestic filling stations have stabilized according to Deputy Prime Minister Alexander Novak.
• Gasoline cracks continue to edge higher but remain low after falling in August and September while diesel spreads are also falling this month amid weak fuel demand. Diesel cracks remain relatively robust compared to historical levels amid low stocks and tight supplies ahead of the winter heating season.
• US refiners are expected to keep producing too much gasoline in the months ahead, causing prices to keep finding downward pressure despite higher oil prices according to OPIS analyst Tom Kloza.
• ExxonMobil restarted a coker at its 522,500 bpd Baton Rouge refinery, Louisiana last Thursday night according to Reuters sources over the weekend.
• US gasoline crack up 0.2$/bbl at 11.59$/bbl
• US ULSD crack up 0.6$/bbl at 39.23$/bbl