- Oil surges to highest since November amid persistent market tightness
- October ’23 WTI gained $1.23 this morning to trade around $88.52/Bbl
- Yesterday, US diesel futures hit a new high since January, driven by reduced global supply as Russian exports are lost, low stockpiles, and reduced sour-crude output from OPEC+ countries
- Diesel inventories may stay low as refiners do fall maintenance while demand rises for farming, trucking, and heating
- In Libya, oil ports were undamaged by a severe storm, allowing output to continue at 1.2 MMBbl/d
- Furthermore, the dollar eased from its recent six-month highs but is still trading higher
- OPEC+ supply cuts lead to growing oil market tightness
- OPEC’s 13 members produced 27.4 MMBbl/d in Q3, 1.8 MMBbl/d below estimated demand
- OPEC data shows a projected supply deficit of 3.3 MMBbl/d in Q4 2023
- If realized, it would be the largest inventory drawdown since at least 2007, squeezing supplies further
- While OPEC says it wants to keep markets balanced, the cartel is shrinking oil inventories. OECD crude stockpiles are already 114 MMBbl below their 2015-2019 average
- Iran to get $6B oil funds back ahead of the prisoner swap (Bloomberg)
- The US agreed to release $6 billion in oil proceeds to Iran as part of a secretly negotiated deal that will see the release of five American citizens
- The deal is part of a broader diplomatic effort by the Biden administration to restore the 2015 nuclear deal with Iran
- US officials have privately acknowledged that they have begun to relax sanctions on oil sales, allowing Iran to boost production
- Iran ramped up its production to over 3 MMBbl/d in August while exports to China have reached a decade high, ranging between 1.5 and 2 MMBbl/d, reported Kpler and TankerTracking