Crude Edges Higher After Drop on Gaza Ceasefire Optimism

Crude markets are edging back higher today after falling about $2/bbl late yesterday amid headlines which sparked optimism for a ceasefire between Israel and Hamas. Crude held onto the losses despite the deletion of earlier tweets from Al Jazeera which had suggested progress on the ceasefire while Bloomberg sources report talks are still in the early stages.

• Brent APR 24 up 0.6% at 79.17$/bbl
• WTI MAR 24 up 0.5% at 74.2$/bbl
• Gasoil FEB 24 down -2.7% at 831.5$/mt
• WTI-Brent down -0.05$/bbl at -5.01$/bbl
• CBS News sources reported the US has a series of strikes planned in the coming days in response to the drone attack on a Jordanian outpost that killed three US service personnel over the weekend.
• OPEC+ made no recommendations to change the group’s output policy in the JMMC meeting but noted high conformity with production quotas. The group is likely to decide in early March on whether to extend cuts into Q2 as is widely expected by the market. OPEC output was down in Jan but still 214kbpd above target according to a Reuters survey.
• Slower global demand growth this year also weighs on prices after soft recent China data despite new property support measures. The US Fed this week signalled openness to cutting, but was in no rush to ease. US non-farm payrolls data is due out later today.
  • Brent APR 24-MAY 24 up 0.04$/bbl at 0.33$/bbl
  • Brent JUN 24-DEC 24 up 0.08$/bbl at 2.37$/bbl
• Time spreads also fell late yesterday with WTI prompt back near parity although the Brent prompt still finish net up on the day as the curve remains in backwardation suggesting tight supply concern amid Red Sea tanker diversions.
• Diesel cracks were down on the day in line with the move in crude although recovered late in the day after news of a plant wide power outage at BP’s 435kbpd Whiting refinery causing evacuation of some workers.
  • US gasoline crack up 0.2$/bbl at 18.4$/bbl
  • US ULSD crack down -0.4$/bbl at 40.04$/bbl