In early November, ICE Brent futures plunged to a four-month low around $80/bbl. The market rally that pushed benchmark oil prices towards triple digits in September reversed sharply in October, despite continued tight crude supplies and an intensifying conflict in the Middle East. At the time of writing, Brent was trading at $82/bbl. The price rout continued into early November. Crude’s forward structure eased in tandem with flat prices, as contango returned to prompt WTI time spreads for the first time since July.

ICE Brent futures slumped by $8/bbl during October, as the macroeconomic outlook deteriorated and supply fears following the Hamas attack on Israel subsided.

In 3Q23, crude oil stocks plunged by a massive 141.4 mb and oil product built by 112.7 mb as supply cuts by OPEC+ countries coincided with increased refinery activity. Oil on water rebounded by 25.3 mb and OECD stocks inched up by 2.9 mb while non-OECD inventories declined by 18.3 mb.

Global observed inventories rose by 9.9 mb in September but remain near historical lows.

Russian crude and product prices, apart from gasoline and VGO, were above the G7 Price Cap. Estimated export revenues fell by $25 million to $18.34 billion as lower international oil prices more than offset a narrowing discount for Russian grades versus North Sea Dated.

Russian oil exports eased by 70 kb/d in October, to 7.5 mb/d, as higher crude oil shipments failed to offset a decline in product flows.

Global crude runs are expected to rise by 1.9 mb/d in 2023 and 1 mb/d in 2024, to average 82.6 mb/d and 83.6 mb/d, respectively. Weaker gasoline cracks drove much of the decline, but still-elevated middle distillate cracks ensured margins remain above the five-year average.

Refinery margins collapsed in October from the near-record levels achieved during 3Q23.There has been no material impact on oil supply flows from the war between Israel and Hamas that started in early October.

Non-OPEC+ will again drive overall growth in 2024, projected at 1.6 mb/d. Growth in the United States and Brazil is outperforming forecasts, helping to propel global supply higher by 1.7 mb/d to a record 101.8 mb/d in 2023. World oil output increased by 320 kb/d in October to 102 mb/d.In the OECD, economic headwinds are increasingly apparent, with this year’s slim demand gains giving way to a contraction in 2024. Overall growth is expected to slow to 930 kb/d in 2024. China is set to account for 1.8 mb/d of the total 2.4 mb/d increase that lifts demand to 102 mb/d in 2023. Chinese oil demand rose to another record high of 17.1 mb/d in September, underpinning global growth.

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