Mid-Day Oil Summary: Crude Holds Above $90/bbl

Crude front month futures have eased back slightly today but Brent is holding above $90/bbl with focus on falling US inventories after the extension to Saudi Arabia and Russia cuts announced earlier this week. Optimism that the US Fed has will paused the recent rate hike cycle is adding to the price support while the market also considers China growth amid strong crude imports.

• Brent NOV 23 down -0.5% at 90.12$/bbl
• WTI OCT 23 down -0.6% at 86.99$/bbl
• Gasoil SEP 23 up 0.8% at 938$/mt
• WTI-Brent down -0.01$/bbl at -3.82$/bbl
• The near term crude option put skews have continued to reduce after Saudi Arabia and Russia extended output cuts until the end of the year. The WTI downside skew is the least bearish since February. Both the second month Brent and WTI 25 delta call-put skews are back up to -2.25% compared to lows of around -4.7% in late August.
• API weekly oil stock data from late yesterday: Crude -5.5mbbl, Cushing -1.35mbbl, Gasoline -5.1mbbl, Distillate +0.3mbbl
• The day delayed EIA weekly petroleum inventory data is due for release this afternoon at 16:00BST. EIA data is expected to show a draw in crude and gasoline stocks with a small build in distillates according to a Bloomberg survey.
• Saudi Arabia raised its oil prices for October to Asia and the US, as the market tightens following production cuts. Saudi Aramco raised the price for Arab Light crude for sale to Asia in October less than expected by 10 cents to $3.60/bbl above the benchmark, the highest since December.
• China August trade data earlier showed strengthening crude imports in August to 52.80m tons, up 20.9% versus July levels driven by a rise in Iranian supplies.
• Iraq exported 3.423mbpd of crude oil in August, a slight fall from 3.444mbpd in July, according to preliminary Oil Ministry data.
• Brent is forecast to average 91$/bbl and WTI at $86.50/bbl in 4Q although $100/bbl could be within reach according to a note from RBC.
• The day delayed API data this week showed another drop in crude and Cushing stocks while a big drop in gasoline stocks added support to the declining gasoline crack spreads. Front month US gasoline futures are near the lowest since early July on the expectation of lower demand as the US Labor Day holiday marked the end of the summer driving season.
• TotalEnergies plans to restart the coker at its 238kbpd Port Arthur, Texas, refinery on Thursday.
• US gasoline crack down -0.3$/bbl at 22.46$/bbl
• US ULSD crack down -0.1$/bbl at 46.5$/bbl