Mid-Day Oil Summary: Crude Slides

Crude is drifting down today, breaking through yesterday’s lows, amid broader risk appetite weakness and concerns that demand growth could be limited by major central banks keeping interest rates higher for longer. A stronger US dollar is helping to offset the strength from tight supplies and low inventories.

• Brent NOV 23 down -0.7% at 92.61$/bbl
• WTI NOV 23 down -0.7% at 89.02$/bbl
• WTI-Brent down -0.14$/bbl at -3.57$/bbl
• WTI-Brent has narrowed this week to a peak of -3.2$/bbl yesterday with support from the ever decrease levels of Cushing storage.
• A total of 463mbbls of current open Nov23 Brent options positions are due to expire against the futures close today. Current open interest is 224k for calls contracts and 239k for puts. The aggregate open interest across all ICE Brent options is 1.560m of calls and 1.309m of puts contracts. Current positions show significant open call exposures currently at 95$/bbl and open call and put positions below the market at 91$/bbl and 90$/bbl.
• The API oil inventory data is due for release today at 16:30 ET.
• Russia’s seaborne crude exports have been curbed by maintenance at export terminals. Shipments from Russia fell by 100k b/d to 3.2m b/d in the seven days to Sep. 24.
• Nigeria’s 650kbpd Dangote oil refinery is likely to start operations in early 2024, FGE said in a note. Dangote plans to start operations in October.
• PetroIneos’ Lavera refinery has halted a unit based on a community alert.
• Diesel cracks extend the recent decline with the US front month spread falling to the lowest since July as demand concerns add to strong exports from China and India this month to offset the support from low inventories and refinery maintenance. The market impact of Russian diesel and gasoline exports ban appears to be relatively limited after Russia yesterday added some exclusions to the ban and with the measure widely expected to be short lived.
• The Gasoil curve backwardation has also softened since the Russian ban was announced. The prompt spread is down from 35.5$/mt on 21 Sep to 26.5$/mt and Dec23-Dec24 is down to the lowest since 7 Sep at 92.25$/mt.
• Gasoil OCT 23 down -2.9% at 937.25$/mt
• ULSD OCT 23 down -2.1% at 3.19$/gal
• Gasoil OCT 23-NOV 23 down -6$/mt at 23.25$/mt
• Gasoil DEC 23-DEC 24 down -13.75$/mt at 90.25$/mt
• EU Gasoil-Brent down -2$/bbl at 30.11$/bbl
• US ULSD crack down -1.9$/bbl at 42.67$/bbl