Mid-Day Oil Summary: Crudes Slides on Venezuelan Sanction Relief

Crude eases back from a high of 91.89$/bbl yesterday with the US government’s announcement to remove several oil related sanctions on Venezuela, easing the pressure from the supply risks from rising Middle East tensions.

• Brent DEC 23 down -1.3% at 90.33$/bbl
• WTI NOV 23 down -1% at 87.41$/bbl
• Gasoil NOV 23 down -1.2% at 901.5$/mt
• WTI-Brent up 0.12$/bbl at -4.06$/bbl
• The Biden Administration Announced Wednesday the removal of a broad array of sanctions against Venezuela’s oil and gas sector in response to a Tuesday deal between Maduro and his political opponents aimed at fairer elections next year. The US is issuing licenses to broadly ease sanctions on Venezuela’s oil and gas sector which could boost oil output by 25% to about 200kbpd. The unwinding of US sanctions on Venezuelan oil could impact Chinese refiners that have gotten used to it as a source of cheap crude in recent years.
• An oil embargo against Israel looks unlikely following a call by Iran yesterday for Muslim countries to impose an oil embargo on Israel according to Citigroup.
• OPEC is not planning to hold an extraordinary meeting or to take immediate action following calls by Iran for Muslim countries to impose an oil embargo on Israel. Any involvement by Iran is the key supply risk in an already tight market.
• Russian President Putin has wrapped up his two-day visit to China Thursday, praising “unprecedented” energy ties between the nations but little in the way of major new developments.
• China has not ruled out a small round of refilling for its strategic petroleum reserves because of the escalating geopolitical risks in the Middle East, Energy Aspects wrote in a note.
• National Iranian Oil Company has set the official selling price for light crude to Asia at +$3.85/bbl, up from +$3.50/bbl for October.
• The Russian government has approved a draft protocol to extend a deal, that is set to expire in 2024, by another ten years to supply crude from Russia to oil refineries in western China according to Interfax.
• Gasoline and diesel cracks edged slightly higher yesterday after a US inventory draw and small recovery in demand although diesel later pulled back in line with the crude price move.
• US gasoline crack down -0.2$/bbl at 10.44$/bbl
• US ULSD crack down -0.1$/bbl at 43.54$/bbl
• Pemex intends to restart the CDU that shut Monday at its 312,500 bpd Deer Park refinery Texas by early next week according to Reuters sources.
• Maintenance works to units at the 291kb/d Marathon Catlettsburg refinery in northeastern Kentucky processing both sweet and sour crude will extend into late November according to Bloomberg sources.
• Russia has no current plans to ease remaining restrictions on diesel exports according to Deputy Prime Minister Alexander Novak via Bloomberg.
• Russian exports of gasoline by railway in the first half of October declined by 80% month on month to 37,000tons, data from market sources and Reuters calculations showed.