Mid-Day Oil Summary: Crude Rebounds

Crude has recouped earlier losses and is trading higher on the day for a net gain on the week, ahead of the Brent Nov contract expiry today. Today’s support comes from a weaker US dollar and from the ongoing drawdown in global inventories ad supply tightness from OPEC+ cuts.

• Brent NOV 23 up 0.8% at 96.15$/bbl
• WTI NOV 23 up 0.9% at 92.57$/bbl
• WTI-Brent down -0.24$/bbl at -3.58$/bbl
• With the Brent November contract expiry today, focus has switched to the Nov WTI-Brent spread which has risen to a high today of -3.155$/bbl before easing back but still below the peak of -2.85$/bbl seen in early trading yesterday.
• The ICE and Nymex commitments of traders reports are due for release after the close today at 18:30BST and 15:30EST.
• China PMIs for September are due tomorrow with optimism of a demand boost from the upcoming China Golden Week holiday period.
• India’s crude oil import from Russia rebounded in September to 1.55mbpd, up by 16% in August, which was a seven-month low, as prices fell against Middle Eastern oil, LSEG data showed.
• Britain is discussing the effectiveness of the price cap on Russian oil with G7 members due to the shift in global oil prices according to UK treasury minister Joanna Penn.
• India’s BPCL plans to shut a 150kpd CDU at its Mumbai refinery from 1 October for a one-month maintenance, a spokesman said.
• Russia may introduce quotas on fuel exports if the ban does not succeed in bringing down prices according to Deputy Minister Alexander Novak. Russian diesel exports had already begun slowing on a month to date basis ahead of the export ban September 21 due to maintenance on the 430kbd Ryazan refinery and the 200kbd Syzran refinery with the largest reduction coming from Baltic ports.
• Gasoline cracks continue to trend lower on weak demand after the end of the peak summer season although US pump prices remain high due to the rising prices of the wider oil market.
• The US gasoline front month crack spread is down from about 26.5$/mt on 14 Sep to 11.2$/mt amid low demand after the end of the summer driving season. EIA data showed gasoline four week average demand falling again this week and still near the five year range lows.
• California Governor Gavin Newsom has directed the state’s Air Resources Board to allow the typically cheaper winter-blend gasoline early as retail prices rise above 6$/gal. Winter-blend gasoline is typically allowed only after 31 Oct when cooler weather slows evaporation of more volatile ingredients that cause smog. California’s average gasoline retail price of $6.032 a gallon according to AAA data is almost 2.2$/gal above the national average. The national average is also at the highest level ever for this time of year. California RBOB inventories are 9.6% above the five-year average for this time of year according to CARB data.
• RBOB OCT 23 down -0.3% at 2.5$/gal
• EU Gasoline-Brent down -0.9$/bbl at 9.69$/bbl
• US gasoline crack down -1.2$/bbl at 10.97$/bbl