Oil futures: Crude up from lows, TTF gas slumps on Australian LNG deal
Quantum Commodity Intelligence – Crude oil futures Thursday remained volatile as markets continued to struggle after a midweek slew of negative data from major economies, while a last-ditch deal to keep Australian gas flowing also weighed on the energy complex.
Front month Oct23 ICE Brent futures were trading at $83.44/b (1650 GMT), compared to Wednesday's settle of $83.21/b and hitting monthly lows of below $82/b earlier in the session.
At the same time Oct23 NYMEX WTI was trading $79.16/b, versus Wednesday's settle of $78.89/b and Thursday's low of $77.59/b
Reports that Woodside Energy had reached a settlement with unions to keep gas flowing from the giant North West Shelf development has knocked natural gas prices over the past 24 hours, in turn likely reducing demand for oil in the form of gas-to-diesel switching.
The proposed strikes, along with action from Chevron LNG workers in Australia, could have wiped 10% off global LNG supplies heading into the crucial winter period. European TTF had rallied by around 40% on the proposed strikes, but have rowed back sharply since late Wednesday in Europe.
TTF for Sep23 slumped 14% late Wednesday and opened nearly 20% lower on Thursday before recovering after Chevron staff voted for measures that could include strike action.
Oil prices had found limited support after data from the EIA Wednesday revealed a larger-than-expected drop in US crude inventories last week of 6.1 million barrels.
PMI index
Markets were under pressure again after S&P Global's flash US Composite PMI index, a measure of manufacturing and service activity, fell to 50.4 in August from 52 in July, its largest decline since November, while Europe continued its run of soft data.
"Disappointing economic data with French, German and UK flash manufacturing and services PMIs coming in well below expectations and pointing to a -0.2% contraction in Q3 GDP," said Michael Hewson of CMC Markets.
Markets had earlier steadied after the Dollar Index tumbled below 103.50 points before rebounding toward 104 again, with focus now on the Jackson Hole Symposium, which will be closely scrutinised for monetary policy from central bankers.
Meanwhile, analysts said this week's drop in prices has raised the prospect of Saudi Arabia rolling its additional voluntary cut of 1 million bpd into October, particularly if progress is made on the reopening of the Iraq-Turkey oil pipeline.
On Wednesday, the Brent/Dubai cash spread widened to record negative levels, as the ongoing OPEC+ cuts and continued demand growth from Asia keep the squeeze on medium sour and heavier crudes.
Likewise, the Brent/Dubai EFS slumped to around three-year lows Wednesday of near-parity for the bal-Oct23 contract, while the Nov23 spread was below $0.50/b.
