OPEC and Iran Supply Risks Support Crude Despite Demand Concerns

Crude is recovering yesterday’s demand driven loses on the risk of production cuts from OPEC and a fresh setback in Iran nuclear deal negotiations.

• Brent NOV 22 up 1.4% at 93.65$/bbl
• WTI OCT 22 up 1.5% at 87.88$/bbl
• Gasoil SEP 22 up 2.5% at 1076.75$/mt
• WTI-Brent down -0.05$/bbl at -6.21$/bbl
• Concerns for demand due to hawkish central bank policy and new covid restrictions in China. had pushed crude to nearly the lowest since Feb yesterday. The fall in prices comes ahead of the of the OPEC+ meeting on Sep 5 when they will consider whether to maintain or cut production targets.
• Price support this morning also comes after the latest response from Iran was described by the US as “non constructive”. Further delays to agreeing a deal look likely to push the possibility of extra Iranian barrels to the market into next year.
  • Brent NOV 22-DEC 22 up 0.18$/bbl at 1.22$/bbl
  • Brent DEC 22-DEC 23 up 0.87$/bbl at 9.49$/bbl
• The OPEC uncertainty and new Iran setback is helping to strengthen time spreads this morning. Recent easing to supply concerns and weaker demand had softened curve backwardation earlier this week.
  • US 321 crack up 0.2$/bbl at 30.21$/bbl
  • US gasoline crack up 0.4$/bbl at 13.99$/bbl
  • US ULSD crack down -0.1$/bbl at 62.48$/bbl
• Refining margins are steady this morning after seeing a bounce from lows of the week early yesterday. Gasoline cracks remain weaker than diesel with yesterday reaching the lowest since early 2021.