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OIL: Mid-Day Oil Summary: Crude Back Negative on the Day

OIL
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Brent crude falls back negative on the day driven by concern for weak demand in China. Front month is set for a net weekly decline after a repricing of risk premium earlier in the week with potential attacks against Iran not expected to target oil infrastructure.

  • The crude options are holding a positive call-put skew as the market remains wary of further developments in the Middle that could impact oil flows.
  • China's oil refinery output in September fell, for a sixth consecutive month, by 5.4% y/y as refiners processed 58.73m metric tons of crude, NBS data showed. Apparent oil demand was down 7% y/y in September, Bloomberg said.
  • There is ‘no peak in sight’ for oil demand with global oil consumption forecast to 108.5mb/d by 2035, according to JPMorgan cited by Bloomberg.
  • China's diesel exports fell 70.9% y/y in September to the lowest level since June 2023 at 350k tons as total oil product exports fell 4.5% y/y to 5.19m tons, according to customs data.
  • In October, just 55% of total China clean product export quotas had been utilized and in Q3, seaborne light end and middle distillate departures finished at just 670kb/d, down 300kb/d against the same period a year earlier according to Kpler.
  • Narrower diesel discounts from Northeast Asian refiners for November loading could boost cargoes from swing suppliers, according to Reuters sources.
  • The 139kb/d Phillips 66 Wilmington refinery in California decision to close was not because of new regulations the company said on Thursday.
    • Brent DEC 24 down 0.7% at 73.95$/bbl
    • WTI NOV 24 down 0.7% at 70.2$/bbl
    • US gasoline crack up 0.2$/bbl at 15.26$/bbl
    • US ULSD crack down 0$/bbl at 21.34$/bbl
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Brent crude falls back negative on the day driven by concern for weak demand in China. Front month is set for a net weekly decline after a repricing of risk premium earlier in the week with potential attacks against Iran not expected to target oil infrastructure.

  • The crude options are holding a positive call-put skew as the market remains wary of further developments in the Middle that could impact oil flows.
  • China's oil refinery output in September fell, for a sixth consecutive month, by 5.4% y/y as refiners processed 58.73m metric tons of crude, NBS data showed. Apparent oil demand was down 7% y/y in September, Bloomberg said.
  • There is ‘no peak in sight’ for oil demand with global oil consumption forecast to 108.5mb/d by 2035, according to JPMorgan cited by Bloomberg.
  • China's diesel exports fell 70.9% y/y in September to the lowest level since June 2023 at 350k tons as total oil product exports fell 4.5% y/y to 5.19m tons, according to customs data.
  • In October, just 55% of total China clean product export quotas had been utilized and in Q3, seaborne light end and middle distillate departures finished at just 670kb/d, down 300kb/d against the same period a year earlier according to Kpler.
  • Narrower diesel discounts from Northeast Asian refiners for November loading could boost cargoes from swing suppliers, according to Reuters sources.
  • The 139kb/d Phillips 66 Wilmington refinery in California decision to close was not because of new regulations the company said on Thursday.
    • Brent DEC 24 down 0.7% at 73.95$/bbl
    • WTI NOV 24 down 0.7% at 70.2$/bbl
    • US gasoline crack up 0.2$/bbl at 15.26$/bbl
    • US ULSD crack down 0$/bbl at 21.34$/bbl