US Daily Oil Summary: Cushing Stocks Build

Crude stockpiles at Cushing Oklahoma rose last week by around 213,000 barrels, marking the highest weekly increase since June, after falling to the lower since 2014 in the week prior, EIA data showed.

• Stocks at Cushing stood at 21.226mbbls as of 20 October. Tank storages were close to falling to the operational low of below 20mbbl in recent weeks.
• Canadian oil prices are weakening relative to US grades due to pipeline bottlenecks that are restricting flows to US refiners being pushed by higher Canadian oil production. Heavy Western Canadian Select crude in Alberta traded at a $25-a-barrel discount to US benchmark West Texas Intermediate on Tuesday according to Bloomberg analysis – the widest since January.
• The US will likely tighten sanctions on Iranian crude in response to the Israel conflict according to RBC’s Helima Croft in a CNBC interview.
• The Wall Street Journal is reporting that according to both US and Israeli officials, Israel has agreed to delay its ground invasion of Gaza to allow for the US to rush missile defences to the region. WSJ: "The Pentagon is scrambling to deploy nearly a dozen air-defense systems to the region, including for U.S. troops serving in Iraq, Syria, Kuwait, Jordan, Saudi Arabia and the United Arab Emirates, to protect them from missiles and rockets. U.S. officials have so far persuaded the Israelis to hold off until those pieces can be placed, as early as later this week."
• USD: Ongoing tensions in the middle east continue to undermine risk sentiment and underpin the US dollar. The USD index stands 0.25% higher on the session, extending on Tuesday’s strong price action. Cycle highs for the index remain around 85 pips above current levels.
• New home sales accelerated to a much-stronger-than-expected 759k in September (vs 680k expected and 676k prior revised), for the highest sales figure since Feb 2022. While Existing home sales continue to plummet however (lowest since 2010 in Sept), as homeowners are unwilling to move and refinance lest they give up their low-rate fixed mortgages. New home sales have pulled higher.
• Mike Johnson won the vote to be House Speaker after a three-week struggle to replace Kevin McCarthy.