Oil Summary at European Close: Crude Rebounds

Crude is trading back positive on the day despite earlier losses, buoyed by the rally in diesel markets after a temporary halt to Russian gasoline and diesel exports. Crude had seen a correction lower following the risk of future rates hikes suggested by the US fed yesterday which contributed to a stronger US dollar.

• Brent NOV 23 up 0.7% at 94.15$/bbl
• WTI NOV 23 up 0.9% at 90.47$/bbl
• Despite the price pull back the market remains over 10$/bbl higher than the low in August with support from OPEC+ cuts and demand optimism for US and China leading to a drawdown in global inventories.
• Morgan Stanley has raised its Q4 Brent forecast to $95/b, up from $82.5/b, although it remains sceptical that prices could surpass $100/b.
• Speaking to Fox News overnight, Saudi Crown Prince Mohammed bin Salman stated that OPEC+ oil production cuts were based on market stability: “If there is shortage of supply our role in OPEC+ is to fill that shortage. If there is oversupply our role of OPEC+ is to measure that for the stability of the market.”
• The Brent crude premium to Dubai has rallied sharply this month, after a steep decline since last November. The Brent-Dubai EFS jumped to a high of $2.60-$2.70 a barrel, compared with an average of 90 cents in the first half of September.
• The Bank of England’s Monetary Policy Committee split five-to-four as it left Bank Rate unchanged at 5.25% at its September meeting.
• China imported record levels of Russian oil in August at 10.54mn tons, up from 8.06mn tons in July beating the prior record in June. Flows from Saudi also surged.
• Fields in Iraqi Kurdistan are raising production and selling into the local market, as output increases despite the ongoing northern pipeline closure.
• Iran expects to increase its daily crude output to 3.4mn bpd in ~10 days according to the managing director of the National Iranian Oil Company, Mohsen Khojastehmehr, on September 20.