Crude oil markets started the Oct. 25-29 trading week on a bullish note as resurgent pandemic concerns failed to dampen continuing expectations of supply tightening due to crude production being outstripped by recovering global demand, says an article published in S&P Global.
ICE December Brent crude futures stood at $86.39/b at 0300 GMT Oct. 25, up 86 cents/b (1.01%) from the Oct. 22 settlement.
Middle East crude
** Spot market activity for December-loading barrels may remain dormant as the focus moves to trade for January.
** However some end-month spot buying may emerge as unsold cargoes of some Middle East medium and sour crude grades were heard offered for December loading.
** Spot trade continued to ease last week as buying neared completion, though some cargoes of Middle East crude did exchange hands, including Taiwan’s CPC procuring Upper Zakum crude for December loading.
** Iraq’s SOMO sold December-loading Basrah Light crude to Petraco at a premium of around 15 cents/b to the grade’s official selling price.
** Dubai cash/futures (M1/M3) averaged $2.25/b in the week ended Oct. 22, against $2.28/b in the week ended Oct. 15.
** Intermonth spreads were higher during mid-morning trade Oct. 25, with December-January pegged at $1.03/b, up 10 cents/b from the Asia close Oct. 22.
** The December Brent/Dubai Exchange of Futures for Swaps was pegged at $4.58/b mid-morning Oct. 25, up 26 cents/b from the Asia close Oct. 22.
Asia Pacific Crude
** Market participants will seek clarity on trade details for the remaining December-loading barrels of Australia’s Ichthys Field Condensate this week.
** Spot trades across Malaysia’s MCO basket of crude grades remain in focus amid thin spot trading activity for Kimanis crude so far this month, despite a longer loading program.
** Traders will be watching out for the term tender results of PetroVietnam Oil’s Su Tu Den cargoes amid resilient gasoil and jet fuel product cracks.
** Details of trading activities for Sudan/South Sudan’s November-loading Nile Blend are expected to emerge amid rangebound low sulfur fuel oil cracks.
** Traders may also seek clarity on the availability for December-loading barrels of Indonesia’s Banyu Urip crude.
** Trading activity for December-loading barrels of Australian heavy sweet crude including Vincent, Pyrenees and Van Gogh was expected to emerge this week.
** Malaysian Crude Oil official selling price differentials for November may also emerge this week.
Delivered Crude
** Traders will be keeping an eye on the monthly sweet crude tender results from Taiwan’s CPC Corp. amid rising flat prices for WTI Midland crude on the month.
** Cash differentials for January-arrival cargoes of Brazilian Tupi crude are expected to dim following patchy Chinese demand despite the release on China’s 4th batch of import quotas.
Crude futures
** The return of pandemic restrictions in Russia has added uncertainty to near-term oil demand outlooks, however, market watchers remain optimistic as the ongoing supply crunch in natural gas and coal supplies continues to fire up oil demand as a substitute for power generation.
** The US’ commercial crude stocks fell 430,000 barrels in the week ended Oct. 15 to 426.54 million barrels, Energy Information Administration data showed Oct. 20, putting them around 6% behind the five-year average for this time of year.
** The bulk of the crude draw was realized at the NYMEX delivery point of Cushing, Oklahoma, where stocks fell 2.32 million barrels to 31.23 million barrels, the largest week-on-week inventory slide at Cushing since February and leaving inventories nearly 40% behind the five-year average and at the lowest since October 2019.
** The next OPEC+ meeting is scheduled for Nov. 4, where the alliance is expected to review production decisions for December.
** The December contract for ICE Brent futures rose 0.79% on the week to settle at $85.53/b Oct. 22, while the December contract for NYMEX light sweet crude rose 1.8% to $83.76/b.
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Source: S&pGlobal
