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OIL: Oil End of Day: EIA Report Sparked Crude Reversal

OIL
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Rising tensions in the Middle East supported oil early in the trading session but the market is still unsure how to price a geopoltical risk premium with no physical oil flows impacted. Meanwhile, a build in this week’s EIA report added the downward sentiment required to cause crude to reverse some earlier gains sparking a sell off at 15:30 London time when it released.

  • Brent DEC 24 up 0.4% at 73.85$/bbl
  • WTI NOV 24 up 0.4% at 70.08$/bbl
  • Numerous analysts have also cited the huge spare OPEC+ capacity sitting on the sidelines were any Iranian barrels to be materially impacted. All prior Middle East geopolitical risk premiums over the last year have priced off because of no impact on physical barrels.
  • Biden says US would not support Israeli strike on Iran nuclear sites. US State Department Spokesperson Matthew Miller says discussions with Israel on Iran response will “try and prevent escalation into that full conflagration.”
  • 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.
  • OPEC released a scathing statement undermining an apparent WSJ sources led story suggesting the Saudi oil minister had warned of $50/bbl oil in the event of non-compliance by the group.
  • 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 in Wednesday’s EIA report.
  • Nigerian crude diffs faced pressure on Wednesday on ample supply and narrow refining margins traders told Reuters.
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Rising tensions in the Middle East supported oil early in the trading session but the market is still unsure how to price a geopoltical risk premium with no physical oil flows impacted. Meanwhile, a build in this week’s EIA report added the downward sentiment required to cause crude to reverse some earlier gains sparking a sell off at 15:30 London time when it released.

  • Brent DEC 24 up 0.4% at 73.85$/bbl
  • WTI NOV 24 up 0.4% at 70.08$/bbl
  • Numerous analysts have also cited the huge spare OPEC+ capacity sitting on the sidelines were any Iranian barrels to be materially impacted. All prior Middle East geopolitical risk premiums over the last year have priced off because of no impact on physical barrels.
  • Biden says US would not support Israeli strike on Iran nuclear sites. US State Department Spokesperson Matthew Miller says discussions with Israel on Iran response will “try and prevent escalation into that full conflagration.”
  • 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.
  • OPEC released a scathing statement undermining an apparent WSJ sources led story suggesting the Saudi oil minister had warned of $50/bbl oil in the event of non-compliance by the group.
  • 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 in Wednesday’s EIA report.
  • Nigerian crude diffs faced pressure on Wednesday on ample supply and narrow refining margins traders told Reuters.