Waiting For The OPEC Response

Energy

While the oil market now has some clarity around the coordinated SPR release, there is still plenty of uncertainty around how OPEC+ may react to a number of key consumers releasing stocks onto the market. OPEC+ is set to meet on 2 December and this is when they will decide whether they stick to their plan of increasing output by 400Mbbls/d per month or pause further supply increases to offset the SPR releases. OPEC’s Economic Commission Board warned that the global oil market could see large surpluses due to these releases, particularly over the early part of next year. As usual, expect plenty of noise in the lead up to next week’s OPEC+ meeting.

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Image Source: Unsplash

The latest weekly data from the EIA shows that commercial US crude oil inventories increased by 1.02MMbbls over the last week, while Cushing crude oil inventories increased by 787Mbbls. The increase in commercial inventories was driven by a 245Mbbls/d increase in crude oil imports over the week, whilst oil exports also fell by a significant 1.02MMbbls/d. On the product side, gasoline and distillate fuel oil inventories declined by 603Mbbls and 1.97MMbbls respectively. Implied demand for refined products also edged higher over the week. Overall, it was a fairly neutral report from the EIA.

Metals

The Industrial metals complex ended higher yesterday, supported by renewed worries over supply tightness along with some optimism for China’s real estate sector. The latest comments from a top Chinese official indicate upcoming measures to stabilize housing prices. Vice Premier Liu He said that a reasonable amount of infrastructure construction should be brought forward to boost domestic demand in the property sector.

Indonesian President Joko Widodo announced that Indonesia may stop exports of bauxite next year, copper the following year and tin in 2024. This is part of an ongoing plan from Indonesia to attract investment in downstream sectors, which would see the export of higher value semi-finished or finished products, rather than raw materials. 

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