Mid-Day Oil Summary: Crude Rises on OPEC+ Cuts

Crude oil prices are trading higher today as Russia and Saudi Arabia reaffirmed output cuts until the end of the year after the market last week lost most of the risk premium with the current containment of the Middle East conflict. Global demand concern also weighed on prices last week after disappointing China manufacturing data while a weaker US dollar has provided some support.

• Brent JAN 24 up 1.5% at 86.2$/bbl
• WTI DEC 23 up 1.7% at 81.85$/bbl
• Saudi Arabia and Russia have reaffirmed intention to keep output cuts in place until the end of the year. Saudi will review the output next month and consider “extending the cut, deepening the cut, or increasing production,” according to the Saudi Press Agency.
• Saudi Aramco maintained its OSP to Asia for Arab Light and Super light in December but adjusted other grades to Asia as prices to Europe where cut and to North America were left unchanged.
• Despite eased US sanctions last month, TankerTrackers still identifies 41 dark fleet tankers waiting off Venezuela with hidden AIS outside the San Jose terminal – drawing questions about the possibility of the latest deal reversing.
• The amount of crude held on tankers that have been stationary for at least seven days fell by 6.7% on the week to 74.10mn barrels as of 3 November, Vortexa data showed.
• Iraq’s crude oil exports in October rose to 3.534mbpd, up from 3.438mbpd and the highest level since March, preliminary Oil Ministry data showed.
• Brent crude oil prices are forecast to average $90/bbl in 2024, with a deep oil market deficit during the second half of the year to lift Brent prices to an average $95/bbl during 2H 2024, ING’s Head of Commodities Strategies, Warren Patterson, said.
• The 5.8m tons per year (115k b/d) Litvinov refinery in the Czech Republic plans a turnaround in April to allow for a move away from Russian crude according to Bloomberg.
• Russia exported around 1.01m b/d of diesel from the Baltic Port of Primorsk in October, equivalent to around 244k b/d, according to Bloomberg.
• India oil demand rose by 3.7% y/y to 19.260 million tons in October in the latest PPAC figures.
• Chinese refiners are expected to process 15.1 mn bpd in November, down from 15.37 mn bpd in October according to FGE with cuts at both state refiners and teapots.
• China’s independent refineries cut purchases of Venezuelan heavy feedstock bitumen blend in October as rising competition emerges after the US eased sanctions on the South American nation last month according to Platts sources.
• Feedstock imports among independent refineries in China’s Shandong Province fell 7.41% on the month in October to 10.06m mt, according to OilChem.
• Lower China refining margins means lower appetite for crude oil by the world’s biggest oil consumer in the next few months according to the head of Vitol Asia Mike Muller in the Gulf Intelligence daily energy podcast.
• Chinese refinery utilisation rates at teapots in the refining hub of Shandong province are averaging about 57% in early November - down from about 65% in early October, according to China-based consultancy Longzhong.
• Weaker demand expectations in Europe and Asia will skew Gasoil margin risks to the downside according to FGE. Gasoil/diesel demand in Europe has been revised down by 180k b/d compared with the outlook last month for the Sep-Dec period due to weak manufacturing and demand data. Asian gasoil consumption is expected to see a seasonal decrease led by China falling 180k b/d on the month in Dec and by a further 320k b/d in Jan.
  • US gasoline crack up 0.3$/bbl at 11.94$/bbl
  • US ULSD crack up 1$/bbl at 42.76$/bbl