Mid-Day Oil Summary: Crude Rebounds

Crude markets are regaining some ground after falling yesterday with no signs yet that the Israel ground offensive has caused an escalation of the conflict to the wider Middle East region. Israeli PM Benjamin Netanyahu yesterday said that Israel will not agree to any ceasefire with Hamas.

• Brent DEC 23 up 0.9% at 88.24$/bbl
• WTI DEC 23 up 0.7% at 82.92$/bbl
• WTI-Brent unchanged at -5.33$/bbl
• The API oil inventory data is due for release today at 16:30 ET. EIA are today due to update the monthly petroleum supply and the crude oil and natural gas production data for August.
• The latest China Manufacturing October PMI showed a downside surprise back to mid year levels at 49.5 adding to uncertainty over the strength of the China economy towards year end.
• Fundamentals will be key in driving oil prices, as the effect of the Israel-Hamas war on crude is starting to wane, with Brent crude oil to trade around $90-100/bbl over the next 12 months, UBS said in a note.
• Venezuela’s Supreme Justice Tribunal said Monday it has suspended the results of the opposition presidential primary that took place this month, further complicating the stance of US towards Venezuelan oil and gas sanctions which it eased earlier this month in return for fairer elections in the country.
• Russian crude exports are on track to hit a four-month high pace, according to Platts vessel tracking.
• Russia’s crude oil flows have climbed for the third consecutive week and are above the targets in their agreement with Saudi Arabia, according to Bloomberg. Russia’s crude shipments averaged 3.64m b/d in the week to Oct. 29, up 3% on the previous week.
• India’s crude oil imports in September rose by 3.9% year on year to 17.4 million tons but down compared to 18.7 million tons in August, according to data from the oil ministry’s Petroleum Planning & Analysis Cell.
• Kpler and Vortexa figures show India’s imports of Russian oil in October between 1.49-1.57m mt, an 8-12% decline on the month.
• Kuwait’s KPC has issued an HSFO tender for loading between November and January according to Reuters sources.
• Kuwait’s fuel oil exports fell to 490,000 metric tons in October after hitting a record high of 720,000 tons in September according to Kpler figures – driven by lower volumes of very low sulphur fuel oil.
• China’s biggest oil and gas producer, Petrochina, said it expects the country’s oil product demand to rise more that 10% in Q4 from a year earlier.
• The European Gasoil curve backwardation has softened throughout October with spreads yesterday falling to the narrowest since July although seeing small gains today. Diesel cracks have also fallen since a peak on 16 Oct but remain relatively robust compared to historical levels amid low stocks and tight supplies ahead of the winter heating season.
• Front-month time spreads for diesel in Asia have also narrowed on signs of weaker demand in Europe with a weaker outlook due to softer consumption in Germany and France according to Bloomberg sources. Supplies from Asian refiners such as Reliance and BPCL are expected to increase with the return of facilities from planned maintenance.
  • Gasoil NOV 23 up 1.2% at 875.75$/mt
  • ULSD NOV 23 up 1.1% at 3$/gal
  • Gasoil NOV 23-DEC 23 up 1.5$/mt at 29.25$/mt
  • Gasoil DEC 23-DEC 24 up 3.5$/mt at 66.25$/mt
  • EU Gasoil-Brent up 0.6$/bbl at 25.38$/bbl
  • US ULSD crack up 0.6$/bbl at 39.77$/bbl