- Oil edges lower despite scarce supplies and shrinking inventories
- November ’23 WTI lost 73c this morning to trade around $92.95/Bbl
- This morning, WTI and Brent reached their highest since August 2022, hitting $95.03/Bbl and $97.69/Bbl, though they later receded slightly
- U.S. crude inventories at the key Cushing, Oklahoma hub have fallen to less than 22 MMBbl last week, alarmingly near the perceived minimum operational level (Quantum)
- Following seven straight draws, Cushing's crude stocks are at 28.1% of total capacity. However, with 16 MMBbl (17% of capacity) set aside for Cushing's operating company, limited stocks are available for contract delivery
- Although direct deliveries through CME Exchange (NYMEX) are limited, the EFP process frequently trades millions of barrels
- In the macro markets, equities rose while the dollar modestly weakened from its ten-month high, supporting crude prices
- Furthermore, the preliminary jobs report is set to be released today, a crucial metric as the FOMC continues its efforts to curb inflation
- Russian oil defies G-7 price cap, surges beyond $85 (Bloomberg)
- Russian Urals grade oil surges to $85.35/Bbl from Baltic's Primorsk and $86/ Bbl from Black Sea's Novorossiysk, defying the G-7's $60/ Bbl cap
- Post-Ukraine invasion, Russia's oil discounts deepened to more than $30/Bbl to Brent, but recent curbs alongside Saudi Arabia have tightened global markets, elevating premiums for their sour crude
- Despite the cap, European insurers and shipowners remain involved in Russian oil trades, with many relying on loose verifications to sidestep sanctions