Mid-Day Oil Summary: Crude Rebounds

Crude markets are regaining ground after drifting lower yesterday as focus remains on any possible escalation in the Israel conflict. Crude maintains much of the premium seen since the Oct 7 attack, but prices have eased as the prospects of an Israeli ground offensive seems to be in doubt, especially while negotiations to release hostages continue. Preliminary US PMI data for October are due later today.

• Brent DEC 23 up 0.5% at 90.24$/bbl
• WTI DEC 23 up 0.4% at 85.85$/bbl
• Gasoil NOV 23 down -2.3% at 899.5$/mt
• WTI-Brent down -0.09$/bbl at -4.39$/bbl
• The key risk comes from any potential impact on Iran supply which could be greater than any boost to Venezuela production amid easing US sanctions.
• The number of vessels that loaded sanctioned Iranian and Venezuelan crude has seen a 3% increase so far this year and has increased 13% in terms of capacity according to Kpler.
• US demand is also back in focus due to the release today of the preliminary October PMIs with uncertainty over future central bank policy amid optimism for a slightly more positive economic picture.
• The IEA World Oil Outlook released today sees oil, gas, coal demand to peak by 2030 with oil demand of 92.5mb/d, down 0.5mb/d from year's report while the 2050 oil demand projection was reduced by 2.4mb/d to 54.8mb/d.
• The API oil inventory data is due for release today at 16:30ET.
• Canadian Natural’s oil output from wells increased by 2.7% in September to the highest since July 2019 at 446kb/d driven by a 13kb/d rise at the Wolf Lake oil sands well site.
• Oman’s new 230kbpd Duqm refinery is ramping up production with the refinery utilization close to 60% as of October according to Petro Logistics.
• Marathon Petroleum’s 593kbpd Galveston Bay refinery in Texas is expected to undergo maintenance at least until mid-November, people familiar with the plant operations said, cited by Reuters.
• Gasoline cracks are stabilizing after reaching a low in mid October as the front month US spread increases from around 7.0$/bbl on 13 Oct up to 11.2$/bbl today. The Front month RBOB gasoline price is up from 215.3c/gal on 12 Oct to 233.8c/gal.
• Weaker than normal demand following the summer driving season and building gasoline stocks had been weighing on gasoline prices since mid August. Supplies remain steady as refining utilisation is boosted by healthy refining margins driven by robust diesel cracks although is currently limited by refinery maintenance.
• EIA data implied demand has seen a slight recovery in recent weeks although US gasoline demand fell 1.8% last week to 8.7mb/d and 0.2% below the four-week average according to GasBuddy.
• European gasoline arrivals in the US were unchanged on the week to 19 Oct at the four week low of 174kb/d, according to bills of lading and ship-tracking data compiled by Bloomberg.
  • RBOB NOV 23 up 0.1% at 2.33$/gal
  • EU Gasoline-Brent up 0$/bbl at 6.11$/bbl
  • US gasoline crack down 0$/bbl at 11.02$/bbl