Oil Summary at European Close: Crude Slips

Crude futures have slipped in European afternoon trading, reversing gains in the morning. The market is weighing the potential for a market surplus next year amid lack of confidence that OPEC+ voluntary cuts can offset the non-OPEC supply growth. The potential slower demand growth from China is also adding pressure to prices.

• Brent FEB 24 down -0.7% at 75.33$/bbl
• WTI JAN 24 down -0.8% at 70.64$/bbl
• Saudi Aramco has notified at least three buyers in North Asia that the firm will supply full contractual volumes of crude oil in January 2024, while buyers have asked for less supply amid high January OSPs to Asia.
• North Sea crude loadings for its 13 main grades are scheduled to drop to 1.93mn bpd in January from 2.05mn bpd in December according to Bloomberg.
• China is allowing crude oil import quotas for 2024 to be used by independent refineries in December according to S&P Global.
• Iraq’s OSP for Basrah Medium to Asia fell to a $1/bbl premium to the Oman-Dubai benchmark according to Bloomberg, down form a $1.80/bbl premium for December.
• Citi expects OPEC+ to maintain its voluntary cuts through 2024 due to global surplus expectations according to Max Layton, its Head of Commodities Research in a Bloomberg tv interview.
• A Libyan crude loading programme shows volumes at 31.7mn bbls, or 1.02m bpd in December compared to 32mn bbl or 1.07mn bpd in November according to Bloomberg.
• Russian oil processing fell to a seven-week low in early December despite a return from maintenance as logistical issues weighed on runs.
• Hungary has secured that the EU’s 12th package of sanctions against Russia will not include a ban on Russian oil supplied via the Druzhba pipeline, TASS reported citing an announcement Dec. 11 by Hungary’s Minister of Foreign Affairs Peter Szijjarto.