Crude prices corrected, with ICE Brent Dec21 contracts back to 84.3 $/b, as diesel cracks in Europe weakened momentarily, due to a 1.3 mb diesel build in the ARA region. Stocks remained below seasonal averages, with 16.3 mb of inventories. Furthermore, long-range weather forecasts in the US and Europe were revised warmer and windier, especially for the prompt weeks, reducing the potential for oil-to-gas switching in the power sector. In Asia, fuel oil prices are collapsing compared to crude prices, giving further evidence that utility demand may disappoint over the winter. Indeed, Fuel oil 180 CST cracks in Singapore dropped by almost 5.7 $/b within two weeks, as they briefly reached crude parity, before going back below crude prices.
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