Oil Summary at European Close: Crude Plummets

Crude futures and spreads are extending earlier declines to the lowest level since early February. Downside pressure is driven by the market’s bearish assessment of the impact of the return of some OPEC supply from October, counter to some analyst expectations.

• Brent AUG 24 down 3.2% at 78.51$/bbl
• WTI JUL 24 down 3.5% at 74.32$/bbl
• The return of some supply earlier than some analysts had expected is adding bearish pressure to the market to add to ongoing concerns for global demand amid a weaker US economic outlook and China demand growth uncertainty.
• Kazakhstan, Russia and Iraq will submit an updated schedule of compensations for overproduction since January 2024 to the OPEC Secretariat by the end of June according to the Kazakh Energy Ministry's press service.
• Goldman Sachs said it viewed the latest OPEC+ meeting at bearish despite the cut extension and expects Brent in the $75-90/bbl range due the signalling of the gradual phaseout of voluntary cuts.
• OPEC+’s decision to toll over oil production cuts of 2.2m b/d into Q3 could worsen a possible very tight summer balance, according to Macquarie Group, cited by Bloomberg.
• Russian oil product exports from the Black Sea port of Tuapse are set to fall ~60% m/m in June from 1.532 million tons scheduled in May according to Reuters sources.
• The Chevron-led Tengizchevroil (TCO) said on Monday it has completed maintenance at the giant Tengiz oil field in Kazakhstan in May.
• Kazakhstan’s oil output (excluding condensate) fell to 1.451mn bpd in May – down 6% m/m: Reuters.