Oil prices continued their move lower yesterday. While ICE Brent settled a little more than 1.4% lower on the day, NYMEX WTI settled below US$70/bbl for the first time since December. The continued weakness comes despite reports that OPEC+ is looking to delay its supply increase scheduled for October. Clearly, lingering demand worries outweigh any potential delay in this supply increase. If these reports turn out to be correct, the next key question is how long the group will delay their supply increases. The oil balance is in surplus through 2025 (assuming OPEC+ increases supply) and so continuing cuts into 2025 might make sense.
API numbers released overnight were constructive. US crude oil inventories are estimated to have fallen by 7.4m barrels over the last week, while refined products also saw small stock declines. Gasoline and distillate inventories fell by 300k barrels and 400k barrels respectively. EIA weekly data will be released later today and a similar crude oil number would be the largest weekly decline since late June.
European natural gas prices also continued their sell-off. TTF settled 3.75% lower on the day, leaving the front-month contract at EUR35.80/MWh – a level last seen back in early August. The weakness in the market comes despite ongoing scheduled maintenance in Norway and also a significant drop in North African pipeline flows into Italy in recent days. However, storage is close to 93% full, while LNG flows into Europe appear to be recovering from the lows in August. GIE data shows that LNG send-outs in Europe have hit their highest level since May.