Oil End of Day Summary: Crude Returns to Rangebound

Crude has moved largely rangebound on the day, relinquishing the earlier gains, as a stronger dollar and wider demand concerns offset Russia’s ban on diesel and gasoline exports.

• Brent NOV 23 down -0.1% at 93.42$/bbl
• WTI NOV 23 up 0.1% at 89.75$/bbl
• Despite the price pull back the market remains over 10$/bbl higher than the low in August with support from OPEC+ cuts and demand optimism for US and China leading to a drawdown in global inventories.
• Morgan Stanley has raised its Q4 Brent forecast to $95/b, up from $82.5/b, although it remains sceptical that prices could surpass $100/b.
• Speaking to Fox News overnight, Saudi Crown Prince Mohammed bin Salman stated that OPEC+ oil production cuts were based on market stability: “If there is shortage of supply our role in OPEC+ is to fill that shortage. If there is oversupply our role of OPEC+ is to measure that for the stability of the market.”
• A federal appeals court in New York ruled that Venezuela’s PDVSA is unable to use sanctions as an excuse for not paying $348mn in defaulted debt.
• The Brent crude premium to Dubai has rallied sharply this month, after a steep decline since last November. The Brent-Dubai EFS jumped to a high of $2.60-$2.70 a barrel, compared with an average of 90 cents in the first half of September.
• The Bank of England’s Monetary Policy Committee split five-to-four as it left Bank Rate unchanged at 5.25% at its September meeting.
• China imported record levels of Russian oil in August at 10.54mn tons, up from 8.06mn tons in July beating the prior record in June. Flows from Saudi also surged.
• Fields in Iraqi Kurdistan are raising production and selling into the local market, as output increases despite the ongoing northern pipeline closure.
• Iran expects to increase its daily crude output to 3.4mn bpd in ~10 days according to the managing director of the National Iranian Oil Company, Mohsen Khojastehmehr, on September 20.