Oil Summary at European Close: Crude Falls

Crude recouped some earlier losses, but resumed the decline driven by economic concerns and possible future interest rate rises despite the ongoing tight supplies due to the OPEC cuts until year-end. A sharp sell-off in Brent futures yesterday resulted in a break of support of the 50-day EMA and levels are now at the psychological support level of around 85$/bbl for the first time since 28 August.

• Brent DEC 23 down -1% at 84.99$/bbl
• WTI NOV 23 down -0.9% at 83.47$/bbl
• Saudi has hiked its official selling prices to Asia for a fifth straight month – something both a Bloomberg and Reuters survey had reported earlier in the week.
• The Turkey-Iraq oil pipeline has been “ready to operate” as of Wednesday according to Turkish Energy Minister Alparslan Bayraktar. The minister added the resumption of flows is depending on Iraq. But Iraq is not resuming crude exports to Turkey via pipeline with issues surrounding compensation still needing to be resolved according to an Iraqi oil ministry official.
• North Sea medium grades – including Gullfaks, Ekofisk, Grane, Troll, Alvheim are being offered at strong premiums to Dated according to traders speaking to Bloomberg.
• The voluntary cut in Saudi Arabia’s production could remain in place beyond the end of the year, according to RBC.
• A tanker laden with gasoline from Saudi Arabia heading to the US has u-turned in the Atlantic and is headed towards West Africa, according to Bloomberg.
• In general, OPEC policy has been very concerned about global oil demand weakness according to Energy Aspects director Amrita Sen.
• US crude exports rose 7.7% from last month to 3.989mb/d in August and an increase of 12% from last year according to Bloomberg calculations based on US Census Bureau data.