Oil Summary at European Close: Crude Steady

Crude is holding steady on the day as the market watches the tensions in the Middle East and potential escalation. Involvement from Iran is the main risk to oil markets concerning any reduction in output or retaliation of tightening of sanctions by blocking the Strait of Hormuz. President Biden is due to visit Israel and Jordan on Wednesday amid US efforts to contain the conflict.

• Brent DEC 23 up 0% at 89.66$/bbl
• WTI NOV 23 down -0.3% at 86.37$/bbl
• The Nov23 WTI options expire against the 19:30BST futures close price today with the main open positions at 85$/bbl, 88$/bbl and 90$/bbl. A total of 578kbbls of open November 23 options positions on CME and ICE are due to expire against the November future close today. Current aggregate open interest is 309k calls and 268k puts.
• The API oil inventory data is due for release today at 16:30 ET.
• Venezuela will resume talks with US officials today in Barbados in a move that will potentially ease sanctions on its oil. Both governments agreed to a deal to ease US sanctions on Venezuela oil in exchange for competitive and international monitored presidential elections next year.
• Chinese President Xi is hosting the 3rd Belt and Road Forum in Beijing on Tuesday with about 140 nations in attendance, including Russian President Vladimir Putin.
• Saudi Aramco’s CEO Amin Nasser said that global oil demand for H2 2023 is likely to be 103m b/d with the company’s spare capacity at 3m b/d.
• Peak demand is forecast at around 105mb/d in 2029 according to Energy Intelligence although with growth narrowing to around 100k-200kb/d annually from 2027.
• Vitol’s CEO Russell Hardy expects Brent crude oil prices to be trading at around $85/bbl next year, he said during the annual Energy Intelligence Forum in London
• Russian seaborne crude shipments last week rose again to 3.51mbpd as of 15 October, up by 285kbpd from the prior, Bloomberg tanker-tracking data showed. The four-week average rose to 3.36mbpd.
• Kazakhstan Energy Minister Almasadam Satkaliyev sees Druzhba pipeline crude-oil shipments to Germany in 2024 “comparable” to this year according to Bloomberg.
• European crudes, such as Troll and Oseburg, climbed to a premium of $5/b against North Sea Dated, the highest since Aug. 2022 amid a tight market, according to Kpler citing Argusmedia’s price assessments.