CRUDE WRAP: WTI (X6) SETTLES USD 1.16 LOWER AT 88.28/BBL

The crude complex was choppy, but ultimately settled lower as participants weighed up supply updates and US/Iran updates. On the former, a Senior Iranian official stated US VP Vance's comments on Iran's nuclear programme are American "ideas and requests", and that US ideas are at opposite with Iran's demands. Prior to this, CBS framed Vance's remarks on Tuesday as softening US demands on Iran to end the war, saying Iran must do something "meaningful" to reduce its nuclear enrichment. Moreover, there was the usual rhetoric from Iran that the Strait of Hormuz remains closed and under full control. More recently, Al Hadath reported that mediation efforts between Washington and Tehran have stalled and progress in negotiations is contingent on Iran's response to Trump's demands regarding its nuclear capabilities.

On the supply angle, crude benchmarks saw downside amid two reports: 1) First LNG train at Qatar's Northfield east expansion project is ready to start, and first gas expected in November; 2) IEA members have expressed support for accelerating the oil stock releases announced in the collective action of March, looking to complete as soon as possible, and would bring c. 100mln barrels to the market. However, Politico reported that the EU will only conduct further releases of oil and diesel reserves after IEA has made it clear such a move would not be damaging to the bloc's energy security. However, France announced it will release 10mln bbls of diesel reserves.

In the weekly EIA metrics, crude saw an unexpected draw, in fitting with the private figures last night, while gasoline saw a surprise build and distillates shallower than forecasted draw. Overall, weekly crude production was up 24k to 13.979mln. Note, SPR fell 0.8mln to 283mln.