OPEC sent markets into a tizzy last week… But bearish fundamentals in oil remain too strong to ignore. Those betting on seeing $120 oil again may be in for a rocky winter. Why? Well, the Fed is going to continue raising rates And real demand destruction is almost certain. But that doesn’t mean there aren’t any opportunities left on the table, OilPrice said.

Amidst the endless seesawing of oil prices, last week’s strong OPEC+ message continues to reverberate in the markets, primarily in the United States where the drastic production cut has nudged legislators to reevaluate their relationship with Middle Eastern kingdoms. Yet another topic emerged this week, an evergreen classic pushing oil prices down – Chinese COVID lockdowns are back on the agenda as the cities of Shanghai and Shenzhen are increasingly likely to see movement restrictions amidst a flareup in infection cases. 

Iranian deal still a distant possibility.U.S.-Iranian nuclear talks on how to revive the 2015 JCPOA agreement are likely to resume after the U.S. midterm elections on 8 November, said the Russian envoy to the Vienna talks, saying the sides are “5 seconds away” from reaching a final agreement.

U.S. might revive NOPEC. U.S. lawmakers are considering passing legislation that would target OPEC on the grounds of the oil group breaching antitrust legislation, potentially even reviving the NOPEC legislation from earlier years, remove U.S. troops stationed in Saudi Arabia and UAE and cut arms supplies. 

Diesel cracks have hit all-time highs this week in both Europe and North America as an already super-tight inventory situation has been aggravated by the ongoing French refinery strike. With the first refinery walkouts starting September 20, France’s refining capacity was reduced to a little below 40% of nameplate capacity, forcing Paris to release strategic product stocks. 

According to Reuters calculations, the benchmark European diesel refining margin and US distillate margin shot up to $77/barrel on Monday, easing somewhat to around $70/barrel in today’s trading. As the U.S. is heading into harvest season with diesel inventories 20 million barrels lower than a year ago, the US still exports diesel into Europe despite unprecedentedly tight physical availability.