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OIL: Oil At Europe Close - Risk Premium Pricing Off

OIL
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Oil markets are facing further pressure on Friday as the geopolitical risk premium fades further and lacklustre global demand and oversupply fears come back into the forefront. 

  • Brent DEC 24 down -2.5% at 72.61$/bbl
  • WTI NOV 24 down -2.6% at 68.82$/bbl
  • Oil made a significant downward move at the start of the week after reports on Monday said that Israel does not intend to strike Iranian oil targets in retaliation for the rocket strikes on October 1.
  • The oil markets have become limited in their ability to hold a premium with no actual impact to oil supplies. It has largely traded sideways since that significant move barring a few sharp sell off’s, mostly notably today.  (last this low on October 1 on the geopolitical risk premium run-up)
  • From our technical analysis: A bearish extension for Brent would threaten the recent bullish theme and expose support at $69.91, the Oct 1 low, and $68.29, the Sep 10 low and a key support.
  • Russian crude processing averaged 5.04mn bpd between October 1-16 due to seasonal maintenance an industry source told Bloomberg – the lowest since May 2022.
  • Russian Urals shipments from the two Baltic ports are set to reach the highest daily volume since April at 7.1m tons, or 1.68mb/d in October.
  • 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.

  • 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.

     

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Oil markets are facing further pressure on Friday as the geopolitical risk premium fades further and lacklustre global demand and oversupply fears come back into the forefront. 

  • Brent DEC 24 down -2.5% at 72.61$/bbl
  • WTI NOV 24 down -2.6% at 68.82$/bbl
  • Oil made a significant downward move at the start of the week after reports on Monday said that Israel does not intend to strike Iranian oil targets in retaliation for the rocket strikes on October 1.
  • The oil markets have become limited in their ability to hold a premium with no actual impact to oil supplies. It has largely traded sideways since that significant move barring a few sharp sell off’s, mostly notably today.  (last this low on October 1 on the geopolitical risk premium run-up)
  • From our technical analysis: A bearish extension for Brent would threaten the recent bullish theme and expose support at $69.91, the Oct 1 low, and $68.29, the Sep 10 low and a key support.
  • Russian crude processing averaged 5.04mn bpd between October 1-16 due to seasonal maintenance an industry source told Bloomberg – the lowest since May 2022.
  • Russian Urals shipments from the two Baltic ports are set to reach the highest daily volume since April at 7.1m tons, or 1.68mb/d in October.
  • 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.

  • 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.