Oil Summary at European Close: Crude Extends Earlier Fall

Crude markets have extended earlier declines, helped by a NY times report that multiple pieces of intelligence show that key Iranian leaders were surprised by the Hamas attack in Israel.. Demand concerns due to the risk of higher for longer central bank rates are limiting upside.

• Brent DEC 23 down -2.6% at 85.38$/bbl
• WTI NOV 23 down -3.1% at 83.28$/bbl
• The Biden administration has not ruled out new sanctions against Iran in relation to the renewed conflict in the Middle East, but no decisions have been made yet, US Treasury Secretary Janet Yellen said.
• Mercuria’s deputy CEO Magid Shenouda said oil could hit $100/bbl if the Middle East situation escalates.
• ARA crude inventories rose 2mn bbls or 4.1% in the week ended October 6 to 51.4mn bbls according to Genscape.
• The day delayed API oil inventory data is due for release today at 16:30 ET ahead of the EIA weekly data tomorrow.
• OPEC+ crude oil production increased by 333kbpd in September to 40.85mbpd, amid higher output from Nigeria, Iran and Kazakhstan according to a Platts survey.
• Crude output cuts this year have boosted OPEC spread production capacity to the biggest in more than a decade except for during the covid driven demand decline. OPEC spare capacity will be more than 4mbpd this year and in 2024 and about 4% of global supplies according to the US EIA.
• Caspian CPC Blend loadings are expected at 1.3-1.4mn bpd in November according to Bloomberg sources.
• Saudi Aramco is in discussions on acquiring a 10% stake in Shandong Yulong Petrochemical, according to Bloomberg.
• MNI COMMODITY WEEKLY: Middle East Instability Draws Questions Around Iranian Barrels but US Intelligence Quashing Fears - https://enews.marketnews.com/ct/x/pjJscQDZk7kI6ag1KxwiTw~k1zZ8KXr-kA8x6nHC5LxptIPjO1OcQ