Oil Summary at European Close: Crude Eases Back

Crude markets are trading lower on the day after another drop in Cushing stocks in EIA data yesterday added to existing tight supply concerns as crude nears 100$/bbl. Upside has been limited by a stronger US dollar and concern for the impact on demand from future central bank policy.

• Brent NOV 23 down -0.6% at 95.96$/bbl
• WTI NOV 23 down -0.9% at 92.83$/bbl
• WTI-Brent down -0.35$/bbl at -3.15$/bbl
• Crude inventories at Cushing fell for the seventh week with a draw of 943k this week taking stocks to the lowest since July 2022 at 21.96mbbls and close to operational low, below which oil is difficult to remove. The low stocks are supporting WTI with the WTI-Brent rallying to a high of -2.65$/bbl overnight while crude backwardation also strengthened.
• Russia is selling oil to India at almost $80/bbl, well above the G7 price cap of $60/bbl, traders said.
• Saudi Arabia supplied surprisingly high crude volumes to their buyers in the month of August, drawing down seaborne inventories (floating storage and in-transit volumes) by 1.5mbd on average.
• Bulgarian lawmakers on Thursday approved a motion to gradually end imports of Russian crude, with a halt to imports from October 2024, from end of 2024 previously scheduled according to Bloomberg.
• The North Sea combined BFOET exports are set to rise to 583kbpd in November, up from 565kbpd in October according to the latest loading schedules.
• North Sea Grane crude loadings are set at six cargoes of 600k bbl in November according to Bloomberg.
• Kazakhstan has shipped 500,000t of crude oil to Germany so far this year, of the total 900,000t planned for this year, Kazakh President Kassym-Jomart Tokayev said.
• US shale executives are expecting record costs to increase according to the latest energy report by the Federal Reserve Bank of Dallas.
• UBS maintains a year-end Brent price target of 95$/bbl and sees crude trading in a range of 90$/bbl to 100$/bbl in the months ahead.
• Rising crude oil prices toward $100/bbl could incentivize Saudi Arabia to revive output again, rather than risking a further price surge that damages the economy, Rapidan Energy President, Bob McNally said.
• RBC’s global head of commodity strategy Helema Croft highlights the lack of options the US administration has to battle high oil prices in a CNBC interview this week.