Oil Summary at European Close: Crude Surges on Middle East Crisis

Fears around further escalations in the Middle East have led to the surge in crude markets on the day. They are now pricing well above the war premium at the start of the week, driven by the initial market response to the attacks in Israel at the weekend and concerns of a wider conflict impacting Iranian barrels in particular.

• Brent DEC 23 up 4% at 89.47$/bbl
• WTI NOV 23 up 4.2% at 86.37$/bbl
• WTI-Brent down -0.23$/bbl at -4.28$/bbl
• Brent DEC 23-JAN 24 up 0.2$/bbl at 1.39$/bbl
• The latest Baker Hughes rig count data is due for release at 13:00ET. The US oil rig count has resumed the decline in recent weeks down to 497 while the gas rig count edging slightly higher to 118 last week.
• Iran’s oil production is currently over 3.3mn bpd according to Tasnim news reports citing Iranian oil minister Javad Owji.
• China crude imports slipped in September to 45.74 million tons or 11.18mn bpd – 10% lower than August’s pace of 12.48mn bpd.
• Delta Air Lines 190,000 bpd Trainer refinery in Pennsylvania is expected to resume operations mid-November following a planned maintenance period that began last month according to its Q3 results.
• Russian PM Alexander Novak said it’s too early to talk about what market decision OPEC+ may take in a TV interview earlier Friday.
• Russian deputy PM said the potential for a further reduction in the Urals discount is decreasing in an interview with Business FM.
• US physical crude prices have fallen this week as Saudi Arabia reaffirmed support for OPEC+ efforts to keep prices stable helped to reassure markets that supplies might be boosted in the event of supply disruption according to Bloomberg.
• A risk premium remains in oil prices, as the market keeps a watch of the ongoing conflict in the Middle East hitting supply, Vandana Hari, Founder of Vanda Insights told CNBC.