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OIL: Crude Rises With Focus on Middle East Supply Risk

OIL
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Crude is again trading higher but below a peak of $76.14/bbl yesterday as focus remains on ongoing Middle East tensions. Upside was yesterday limited by an unexpected US crude inventory build while OPEC plans to bring back supply from December remain in place.

  • Oil markets are in watch and wait mode, expecting a retaliatory attack by Israel and whether Iran’s energy infrastructure will be impacted.  President Joe Biden has made it clear that there was no support from the US for Israel to attack Iran’s nuclear facilities in retaliation for the missile attacks.
  • OPEC has enough spare oil capacity to compensate for a full loss of Iranian supply but the group would struggle if installations in neighbouring Gulf countries were impacted, Reuters said.
  • The JMMC will continue to monitor member adherence to the agreed production adjustments after reviewing the July and August production data, an OPEC press release said Wednesday.
  • EIA showed US crude inventories unexpectedly rose driven by a much larger than expected decline in refinery runs and supported by an increase in production to 13.3mb/d and higher imports. Refinery utilisation is down to 87.6% of capacity and below 90% in all PADD regions amid maintenance.
  • Cracks spreads are holding steady today after gains in gasoline yesterday although diesel spreads have eased off following gains in H2 September.
  • US gasoline demand fell for a fifth week to a six month low but following the seasonal trend to remain just below the previous five year average.
    • Brent DEC 24 up 1.4% at 74.91$/bbl
    • WTI NOV 24 up 1.5% at 71.18$/bbl
    • Brent DEC 24-JAN 25 up 0.04$/bbl at 0.4$/bbl
    • Brent DEC 24-DEC 25 up 0.28$/bbl at 2.1$/bbl
    • US gasoline crack up 0.1$/bbl at 13.61$/bbl
    • US ULSD crack down 0.2$/bbl at 21.29$/bbl
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Crude is again trading higher but below a peak of $76.14/bbl yesterday as focus remains on ongoing Middle East tensions. Upside was yesterday limited by an unexpected US crude inventory build while OPEC plans to bring back supply from December remain in place.

  • Oil markets are in watch and wait mode, expecting a retaliatory attack by Israel and whether Iran’s energy infrastructure will be impacted.  President Joe Biden has made it clear that there was no support from the US for Israel to attack Iran’s nuclear facilities in retaliation for the missile attacks.
  • OPEC has enough spare oil capacity to compensate for a full loss of Iranian supply but the group would struggle if installations in neighbouring Gulf countries were impacted, Reuters said.
  • The JMMC will continue to monitor member adherence to the agreed production adjustments after reviewing the July and August production data, an OPEC press release said Wednesday.
  • EIA showed US crude inventories unexpectedly rose driven by a much larger than expected decline in refinery runs and supported by an increase in production to 13.3mb/d and higher imports. Refinery utilisation is down to 87.6% of capacity and below 90% in all PADD regions amid maintenance.
  • Cracks spreads are holding steady today after gains in gasoline yesterday although diesel spreads have eased off following gains in H2 September.
  • US gasoline demand fell for a fifth week to a six month low but following the seasonal trend to remain just below the previous five year average.
    • Brent DEC 24 up 1.4% at 74.91$/bbl
    • WTI NOV 24 up 1.5% at 71.18$/bbl
    • Brent DEC 24-JAN 25 up 0.04$/bbl at 0.4$/bbl
    • Brent DEC 24-DEC 25 up 0.28$/bbl at 2.1$/bbl
    • US gasoline crack up 0.1$/bbl at 13.61$/bbl
    • US ULSD crack down 0.2$/bbl at 21.29$/bbl