Mid-Day Oil Summary: Crude Trends Lower

Crude prices are edging lower today, after trading shortly in positive territory, as supply risks are weighed against economic demand concerns as the market looks towards US CPI data due later this week. The impact of events in Israel on oil flows is currently highly uncertain but there is no immediate impact on crude flows expected. Potential Iranian involvement in the attacks adds a risk premium to oil prices.

• Brent DEC 23 down -0.5% at 87.72$/bbl
• WTI NOV 23 down -0.5% at 85.94$/bbl
• Strong crude curve backwardation is reflecting the tight supply concerns although prompt spreads eased back after an initial surge yesterday while the longer dated spreads held onto the earlier gains.
• Brent DEC 23-JAN 24 down -0.02$/bbl at 1.63$/bbl
• Brent DEC 23-DEC 24 down -0.26$/bbl at 8.33$/bbl
• Venezuela and the US have progressed in talks that may allow an additional foreign firm to take Venezuelan oil in return for debt repayment according to Reuters sources.
• Saudi Aramco has notified at least four North Asian buyers that it will supply full contractual volumes of crude oil in November, sources with knowledge told Reuters.
• Chinese onshore crude inventories have been drawing lower since late July according to Vortexa figures.
• Peak refinery maintenance in the Middle East will reduce capacity by around 980kbpd according to FGE.
• India’s state owed refiner HPCL will cut diesel purchases from other domestic refiners now it has commissioned a 3mtpa hydrocracker at its Vizag refinery.
• The Panipat refinery in northern India plans a 30-45 day maintenance shutdown to a 6m tons a year crude distillation unit in November according to an Indian Oil Corp executive.
• Bayernoil’s Neustadt refinery in southern Germany has lowered output since Friday after a fire at the facility damaged a mild hydrocracker unit, which primarily produces distillates according to Argusmedia.
• Russia maintains plans for oil refining growth this year according to Interfax citing Energy Minister Nikolai Shulginov. "The refining level has not fallen significantly. There has been growth since the beginning of the year," said Shulginov
• Gasoline crack spreads are steady today after falling again yesterday with the European front month Gasoline-Brent spread at the lowest since December and the US spread the lowest since April 2020. The US front month crack is down from over 40$/bbl in mid August to a low of nearly 7.4$/bbl yesterday.
• Refinery economics at current price levels remain attractive for high utilizations according to RBC. The prompt gasoline crack looks cheap by historical standards, but runs are expected to remain strong supported by a strong distillate crack as refineries do not operate in isolation by product.
• RBOB NOV 23 down -0.1% at 2.24$/gal
• EU Gasoline-Brent up 0.3$/bbl at 5.2$/bbl
• US gasoline crack up 0.3$/bbl at 7.98$/bbl