보기: Market Movers Americas, Dec 4-8: US crude weighs OPEC+ decision, Panama Canal continues to impact shipping

This week, crude futures are holding near four-month lows following the OPEC+ group’s recent decision to deepen its voluntary cuts. The market is overall skeptical that the cuts will be enough to eliminate a supply overhang in the first quarter of 2024. The headlined 2.2 million b/d of voluntary cuts may actually result in closer to half a million barrels per day of new supply leaving the market. This takes into consideration a rollover of existing supply from Saudi Arabia and Russia, as well as an already scheduled increase in the UAE’s baseline production. On top of that, there are concerns that some members may not comply with the new quotas, since the agreement was only reached after days of intense negotiations.

In shipping, freight costs for Medium Range refined product cargoes from the US Gulf Coast to West Coast South America are poised to rise disproportionately compared to Atlantic Basin rates. Panama Canal tanker transit fees have tripled to $2 million since early November, and shipowners now consider Chile to be the only feasible destination, since they can ballast round the southern tip of South America through the Strait of Magellan.

Finally, the US natural gas market is watching federal data to see if the storage withdrawal season has begun in earnest. The Energy Information Administration estimated a rare late season injection in its latest report, bringing the US storage surplus to nearly 9% above average. The sector expects an above-average drawdown to follow.

I’m Tara Olaleye. Thanks for kicking off your Monday with S&P Global Commodity Insights.