Crude Eases After Surge in Response to Reports of Strikes on Iran

Crude surged back towards levels seen at the start of the week and above $90/bbl before easing back following reports that Israel has launched strikes on Iran in response to last weekend's missile attacks.

• Brent JUN 24 up 1.4% at 88.35$/bbl
• WTI MAY 24 up 1.5% at 83.99$/bbl
• Gasoil MAY 24 up 1.4% at 789.25$/mt
• WTI-Brent down 0.02$/bbl at -5.03$/bbl
• US officials have reportedly confirmed that a strike has taken place according to Bloomberg but details are still limited. There are reports of explosions in the Iran city of Isfahan, while Fox news notes that the strike was limited in scope and didn't involve manned aircraft.
• Iranian related headlines suggest there was no missile attack, but that reports of explosions were the activation of the country's air defence system with three drones observed in the sky and nuclear facilities are unharmed.
• Conflict in the Middle East has so far had no impact on physical oil supplies from the region to the global market. Upside price pressure is also limited by global demand growth uncertainty and a possible delay to Fed cuts this year. Brent front month reached a high of $92.18/bbl on April 12.
  • Brent JUN 24-JUL 24 up 0.05$/bbl at 0.76$/bbl
  • Brent JUN 24-DEC 24 up 0.35$/bbl at 4.39$/bbl
• Crude time spreads and call skews also surged in reaction to the reports although both have also reverse much of the initial gains.
• US gasoline and diesel cracks furthered their fall yesterday amid weak EIA demand data earlier this week with US diesel cracks trading at the lowest since May 2023.
  • US gasoline crack down 0.2$/bbl at 30.85$/bbl
  • US ULSD crack up 0.2$/bbl at 24.04$/bbl