OIL: Crude Markets Weigh Tighter Supply with Soft China Demand Growth

Crude markets are relatively unchanged and within the $2/bbl range seen yesterday with muted demand growth expectations in China weighed with supply disruption from Libya, falling US inventories and potential lower interest rates in the US.

• A Bloomberg survey found that the majority of respondents believe that China won’t achieve its 2024 growth target of 5%.
• Analysts are split on whether OPEC will reduce its output cuts as planned from October, according to Bloomberg. OPEC provisionally plans to return 543kb/d of supply during Q4 but the group has previously stressed the policy remains flexible if the market appears to be oversupplied.
• EIA data yesterday showed US crude inventories fell last week by 0.85kbbl but less than expected with an increase in refinery runs and drop in production partly offset by lower net exports on the week. Cushing inventories fell to the lowest since November last year.
• Libyan crude production has fallen at least 400kbd since the eastern government ordered a total shutdown according to Bloomberg sources.
• Gasoline cracks saw some support while diesel remains weak following EIA data showing small increases in US implied demand. Four week average implied distillates demand remains below the previous seasonal five year range.
  • Brent OCT 24 up 0.1% at 78.74$/bbl
  • WTI OCT 24 up 0.2% at 74.69$/bbl
  • Brent OCT 24-NOV 24 down 0.05$/bbl at 1.02$/bbl
  • Brent DEC 24-DEC 25 up 0.01$/bbl at 3.35$/bbl
  • US gasoline crack down 0.1$/bbl at 12.07$/bbl
  • US ULSD crack down 0.2$/bbl at 20.16$/bbl