Mid-Day Oil Summary: Crude on Track for Weekly Net Gain

Front month crude prices are heading for a net gain on the week primarily driven by supply risks from an escalation in the conflict in Israel. Involvement from Iran is the main risk to oil markets with potential impacted supply greater than any increase in supply from Venezuela after an easing of US sanctions.

• Brent DEC 23 up 1% at 93.35$/bbl
• WTI NOV 23 up 1.4% at 90.6$/bbl
• Gasoil NOV 23 up 2.1% at 928.75$/mt
• WTI-Brent up 0.18$/bbl at -3.89$/bbl
• The WTI-Brent spread continues to narrow after another draw in Cushing stocks towards operational minimum levels in EIA data this week.
• Comments from US Fed Chair Jerome Powell yesterday are also supportive with a slightly more positive economic picture and hope that there will be no further interest rate hikes.
• The US DOE yesterday announced plans to buy crude to refill the SPR at 79$/bbl or below out to at least May 2024. They aim to buy 6mbbls for Dec & Jan delivery following on from 4.8mbbls already purchase at less than 73$/bbl.
• US senators, both Republican and Democrat, are readying legislation to help the federal government enforce current sanctions on Iran according to Reuters reports from Republican Senator Joni Ernst.
• South Korea could release oil from its strategic petroleum reserve if there is an escalation of the Israel-Hamas conflict to other parts of the Middle East according to Korea National Oil Co.
• Venezuela has released five prisoners, including a well-known opposition figure as part of Washington's demand that certain prisoners be freed this week in return for temporarily eased sanctions on its oil & gas sector.
• India imported 1.76mbpd of Russian oil from April to September – the first half of fiscal 2023/24 – more than double compared with the same period last year, tanker data from industry sources showed.
• China’s oil imports from Russia fell 17% on the month in September from the record high in August according to General Administration of Customs data.
• Gasoline cracks are higher on the week after tentative signs of stronger demand this week and with tighter supplies from refinery outages.
• US gasoline crack up 0.2$/bbl at 9.58$/bbl
• US ULSD crack up 0.6$/bbl at 43.8$/bbl
• Russia is looking at the operating results of its oil refineries as part of its guidance on future changes to the oil products ban according to Energy Minister Nikolai Shulginov.
• Chinese refinery oil product exports are set to fall 40% in November m/m according to OilChem.
• Chinese independent refineries face rising feedstock costs which are squeezing refining margins.
• China’s gasoline inventories rose by 2.4% on the week to 13.24m tons in week to 19 October, highest level since 25 May, according to data from OilChem.
• China's fuel oil imports in September fell to 1.04mn tons, down by 25% from August levels, and the lowest level so far this year, data from the General Administration of Customs showed, amid high inventory levels.
• Kuwait Petroleum has increased spot tenders for HSFO this October – the latest one closes Friday.