Oil Summary at European Close: Crude Pulls Back

Crude front month is extending its pull back to the lowest level since 13 October, breaking through the first technical support level, weighed on by a stronger US dollar US dollar with the higher-than-expected US S&P global October manufacturing PMI at 50 vs 49.8 prior. Meanwhile, considering fears of Middle East escalation, The IDF Chief of Staff said that the ground offensive in Gaza is being delayed by “strategic considerations”.

• Brent DEC 23 down -2.1% at 87.93$/bbl
• WTI DEC 23 down -2.4% at 83.42$/bbl
• The key risk comes from any potential impact on Iran supply which could be greater than any boost to Venezuela production amid easing US sanctions.
• The number of vessels that loaded sanctioned Iranian and Venezuelan crude has seen a 3% increase so far this year and has increased 13% in terms of capacity according to Kpler.
• US demand is also back in focus due to the release today of the preliminary October PMIs with uncertainty over future central bank policy amid optimism for a slightly more positive economic picture.
• The IEA World Oil Outlook released today sees oil, gas, coal demand to peak by 2030 with oil demand of 92.5mb/d, down 0.5mb/d from year's report while the 2050 oil demand projection was reduced by 2.4mb/d to 54.8mb/d.
• The API oil inventory data is due for release today at 16:30ET.
• Russia shipped around 3.53m b/d of crude in the week to Oct. 22, up 0.2m b/d on the week, according to Bloomberg.
• Canadian Natural’s oil output from wells increased by 2.7% in September to the highest since July 2019 at 446kb/d driven by a 13kb/d rise at the Wolf Lake oil sands well site.
• Kazakhstan is planning to ship at least 80,000 t/month of oil from the Kashagan field in October to April through the Atyrau-Samara pipeline via the Black Sea port of Novorossiysk, KazTransOil said, cited by Bloomberg.
• The loosening of sanctions on Venezuela’s oil industry will be a boost to US refiners, well-equipped to process its heavy crude, according to Bloomberg.
• Crude oil prices must hit $110/bbl before Saudi Arabia will ease its current crude production cuts, Pierre Andurand said, cited by Bloomberg.
• Saudi Aramco’s CEO Amin Nasser said Oct. 24 that oil demand is currently strong and saw significant demand growth for oil.