Mid-Day Oil Summary: Crude Slides

Crude prices are extending the pull back from a jump higher on Wednesday driven by headlines around Israel’s ground invasion plans formalizing. Front month crude retains some of the premium added by Netanyahu's plans, but oil futures are reflecting an overriding theme of global demand weakness, apparent in the physical market.

• Brent DEC 23 down -1.5% at 88.82$/bbl
• WTI DEC 23 down -1.6% at 84.05$/bbl
• Gasoil NOV 23 up 0.1% at 880.75$/mt
• WTI-Brent down -0.01$/bbl at -4.76$/bbl
• The Israel-Hamas conflict escalated further overnight – with confirmation that the Israeli military had put a “relatively large” contingent of troops and tanks into northern Gaza in order to attack several Hamas militant targets in the area. While the incursion at present looks short of a full ground operation in the territory, it has caught markets by surprise given US pressure on the Israeli government to delay and full invasion.
• Venezuela’s primary opposition leader Maria Corina Machado has claimed victory this week, she remains banned to run by Maduro’s government – something which risks the recent US oil sanctions relief.
• The ICE Brent Dec23 Option Expiry is today at 19:30BST close.
• The ECB’s next monetary policy decision will be released today 14:15CET (13:15BST).
• Global oil inventories, both commercial and in SPRs – have fallen the lowest level since at least January 2017 to 3.31bn barrels this month according to Kpler data.
• The recent sanctions action taken by the US against two vessels found to be carrying Russian oil above the G7 price cap has pushed more volumes onto the ghost fleet according to Reuters sources.
• CDU capacity utilisation rates at China’s independent refineries fell by 1.67 percentage points in the week to Oct. 26, averaging 68.14%, according to OilChem.
• Overproduction of US gasoline likely to be a problem into 2024. Domestic distillate demand plus exports suggests minimal inventory accumulation when refiners return from turnarounds next month.
• European diesel and gasoil imports are expected to reach 981kbpd in October, down by 42% on the year and 11% below September levels according to Bloomberg. This is largely due to a significant decline in shipments from the East, mainly Saudi Arabia and India, due to seasonal maintenance.
  • US gasoline crack up 0.6$/bbl at 10.37$/bbl
  • US ULSD crack up 0.8$/bbl at 39.42$/bbl
  • EU Gasoline-Brent up 0.7$/bbl at 5.77$/bbl
  • EU Gasoil-Brent up 0.4$/bbl at 26.1$/bbl