OIL: Crude Extends Decline on Weak Demand and Expected OPEC Supply

Crude extends the recent decline with the risk of a market surplus due to weak demand and the expectation of additional supply from OPEC+ from Q4 onwards weighing on both futures and spreads. 

• Some analysts suggest a prolonged Libya outage could enable OPEC to decide to stick to the preliminary plan to return voluntary cuts gradually from Q4.
• Saudi OSPs and allocations expected this week could provide some indications of OPEC plans for October.
• Front month Brent has fallen below the low from yesterday but remains above the low of $75.65/bbl from Aug 21. The Dec24-Dec25 spread is also falling towards a low from Aug 21 although the prompt spread has seen more support over the last week due to the near term disruption to Libyan supplies.
• Technical analysis shows key Brent support at the Aug 5 low of $74.62/bbl and WTI support at $70.88/bbl.
  • Brent NOV 24 down 1.7% at 76.19$/bbl
  • WTI OCT 24 down 0.9% at 72.86$/bbl
  • Brent NOV 24-DEC 24 down 0.14$/bbl at 0.65$/bbl
  • Brent DEC 24-DEC 25 down 0.4$/bbl at 2.85$/bbl
  • WTI OCT 24-NOV 24 up 0.01$/bbl at 0.91$/bbl
  • WTI DEC 24-DEC 25 down 0.18$/bbl at 3.22$/bbl