Crude Eases Back Amid Demand Growth Concern Ahead of EIA Data

Crude eases back after gains yesterday with the potential for delayed US interest rate cuts amid persistent inflation and slow growth in China weighing on prices. Yesterday crude traded back up to the upper end of the recent range with support from a possible OPEC+ cut extension amid ongoing Red Sea shipping disruption but with Israel/Hamas ceasefire negotiations ongoing.

• Brent APR 24 down -0.5% at 83.21$/bbl
• WTI APR 24 down -0.5% at 78.44$/bbl
• Gasoil MAR 24 down -0.9% at 838.25$/mt
• WTI-Brent down -0.01$/bbl at -4.77$/bbl
• China’s oil demand is expected to slow this year with growth of 1% to 15.3mb/d according to CNPC.
• OPEC+ is considering extending voluntary output cuts into Q2 and could keep them in place until the end of the year according to Reuters.
• The UK Navy reported a rocket exploded 3-5NM from a vessel, but it is safe and will continue to its next port. The US has hit 230 targets to date in Yemen to contain attacks on Red Sea shipping.
• Shipping giant Maersk has warned that ongoing disruptions to flows through the Red Sea could drag into H2 2024 according to Reuters.
  • Brent APR 24-MAY 24 down -0.03$/bbl at 0.96$/bbl
  • Brent JUN 24-DEC 24 down -0.1$/bbl at 3.39$/bbl
• Crude backwardation remains strong with time spreads holding just below the highest since October from last week suggesting tight market conditions.
• Diesel and gasoline cracks have found some support ahead of the updated US inventory data later today. API data last night showed another large crude build and oil product draws.
  • US gasoline crack up 0.5$/bbl at 30.61$/bbl
  • US ULSD crack up 0.3$/bbl at 34.62$/bbl