Oil End of Day Summary: Crude Falls

Crude has fallen sharply on the day but is currently trading above its low of $82.4/b as economic concerns and possible future interest rate rises outweigh the ongoing tight supplies due to the OPEC cuts until year-end.

• WTI NOV 23 down -2% at 82.57$/bbl
• WTI NOV 23-DEC 23 down -0.08$/bbl at 1.59$/bbl
• Saudi has hiked its official selling prices to Asia for a fifth straight month – something both a Bloomberg and Reuters survey had reported earlier in the week.
• The Turkey-Iraq oil pipeline has been “ready to operate” as of Wednesday according to Turkish Energy Minister Alparslan Bayraktar. The minister added the resumption of flows is depending on Iraq. But Iraq is not resuming crude exports to Turkey via pipeline with issues surrounding compensation still needing to be resolved according to an Iraqi oil ministry official.
• The Keystone Pipeline carrying oil between Alberta, Canada to the US Midwest has rebounded to 0.5m b/d, near the capacity of 0.6 b/d, according to Bloomberg sources citing Wood Mackenzie.
• The US government confirmed Oct. 5 that it would auction oil and gas leases in the USGC on Nov. 8 amid a court order demanding an expanded sale, according to Reuters.
• Norway’s Johan Sverdrup medium sour crude reached a record high differential against Dated Brent October 4 according to Platts.
• North Sea medium grades – including Gullfaks, Ekofisk, Grane, Troll, Alvheim are being offered at strong premiums to Dated according to traders speaking to Bloomberg.
• The voluntary cut in Saudi Arabia’s production could remain in place beyond the end of the year, according to RBC.
• A tanker laden with gasoline from Saudi Arabia heading to the US has u-turned in the Atlantic and is headed towards West Africa, according to Bloomberg.
• In general, OPEC policy has been very concerned about global oil demand weakness according to Energy Aspects director Amrita Sen.
• US crude exports rose 7.7% from last month to 3.989mb/d in August and an increase of 12% from last year according to Bloomberg calculations based on US Census Bureau data.