Oil Summary at European Close: Crude Extends Gains
Crude markets are rising to the highest level since 15 November supported by a weaker US dollar and rising speculation that the OPEC+ group could extend or deepen output cuts during the next meeting. Middle East tensions are also posing an upside risk to prices.
- Brent JAN 24 up 2.7% at 82.81$/bbl
- WTI DEC 23 up 2.5% at 77.77$/bbl
- WTI-Brent down -0.17$/bbl at -4.68$/bbl
- Middle East tensions are still an upside risk to prices with shipping in focus after Iran-backed Houthi Rebels seized a Japanese chartered vessel in the Red Sea on Sunday according to Bloomberg. Iran denied its role in the seizure of the ship.
- Venezuela will not accept "ultimatums from anyone" according to Venezuela's National Assembly President Jorge Rodriguez after the US warned it will assess eased sanctions relief if fair election progress is not made.
- The president of the Petroleum Association of Japan expects OPEC+ to extend its supply cuts after December to support oil prices.
- The extension of Saudi Arabia and Russia voluntary oil production cuts into next year “feels more real” but any additional cuts would have to involve more countries than just Saudi Arabia according to Kieran Gallagher, managing director of Vitol Bahrain.
- The UAE has likely ensured its 2024 OPEC+ quota upward revision due to continued high production levels, while Nigeria, Congo and Angola continued to undershoot their targets, OPEC secondary sources data showed.
- Brent needs to average $88/bbl in Q4 rising to $90/bbl for the balance of the quarter with a Q4 deficit of 300kb/d according to Deutsche Bank.
- Crude floating storage stationery for at least seven days rose 24% w/w to 87.98mbbls as of November 17 according to Vortexa with the Middle East up to the highest since August.
- China's crude imports from Russia - including supplies via pipelines and seaborne shipments - totalled 8.54mn tons in October, 5.6% lower m/m, Customs data showed.