Crude Drifting Lower but Remains Near Range Highs

Crude has drifted lower after support yesterday from a smaller than expected build in US crude inventories and increase in implied product demand in the latest EIA weekly petroleum data. The support added to tensions in the Red Sea, which are set against the mixed demand picture. Crude front month however remains up towards the top end of the $10/bbl range seen this year.

• Brent APR 24 down -0.5% at 83.23$/bbl
• WTI APR 24 down -0.6% at 78.12$/bbl
• Gasoil MAR 24 up 0.5% at 841$/mt
• WTI-Brent down -0.02$/bbl at -5.11$/bbl
• US Fed officials have mostly pushed back against the idea of near term rate cuts suggesting higher rates for longer which could weigh on demand.
• Middle East tensions and Red Sea diversions are helping support oil markets amid signs of tighter supplies. The Houthi leader said the group is looking to 'escalate' Red Sea operations and following reports regarding an attack on another vessel in the Gulf of Aden yesterday. Reports however suggest Israel will send negotiators to ceasefire talks taking place in Paris.
  • Brent APR 24-MAY 24 unchanged at 0.97$/bbl
  • Brent JUN 24-DEC 24 down -0.11$/bbl at 3.29$/bbl
• Crude backwardation remains strong with both prompt and longer dated time spreads seeing steady net gains this week to the highest since October.
• Gains in the four week average implied demand for both gasoline and distillates in the EIA data yesterday helped cracks to regain ground from earlier losses. The data however continued to show low refinery utilisation as key facilities struggle to recover from outages.
  • US gasoline crack down -0.3$/bbl at 28.69$/bbl
  • US ULSD crack down -0.3$/bbl at 34.91$/bbl