Crude Drifts Lower on Stronger USD and Middle East Ceasefire Talks

Crude is drifting lower under pressure from a stronger US dollar ahead of the FOMC decision tomorrow after falling yesterday amid a declining risk premium and hope of an Israel-Hamas ceasefire.

• Brent JUL 24 down 0.2% at 86.99$/bbl
• WTI JUN 24 down 0.3% at 82.42$/bbl
• Gasoil MAY 24 down 0.4% at 778.5$/mt
• WTI-Brent down 0.03$/bbl at -5.8$/bbl
• Wires yesterday carried comments from Blinken saying that Hamas has in front of them a proposal that is "extraordinarily generous". Saying that Hamas "needs to decide, and it needs to decide quickly."
• Crude backwardation has softened as the front month as fallen and with concern for global demand growth amid the possibility of higher US interest rates for longer. The Fed will be monitored closely as any further indication that the first rate cut will be delayed further is likely to weigh further on oil prices.
• A positive print in China’s manufacturing PMI showing expansion for a second month and the highest since Feb 2023 could help support global demand sentiment.
  • Brent JUL 24-AUG 24 down 0.01$/bbl at 0.77$/bbl
  • Brent JUN 24-DEC 24 down 0.1$/bbl at 4.65$/bbl
• US gasoline cracks spread ticked higher yesterday as product prices held up better than crude and despite a 0.5% drop in US gasoline demand last week according to GasBuddy data. The front month spread has rallied from $29.2/bbl to $32.3/bbl in the last week with tight supplies and low stocks at the start of the summer driving season.
  • US gasoline crack up 0.1$/bbl at 32.31$/bbl
  • US ULSD crack down 0.1$/bbl at 24.34$/bbl