Crude Edges Higher Amid Risk of Response from Israel

Crude markets are edging higher today with focus still on geopolitical risks in the Middle East with any further escalation raising concerns for oil supplies from the region. Israeli military officials said the country has no choice but to respond to the attacks by Iran at the weekend despite calls from EU and US to avoid an escalation.

• Brent JUN 24 up 0.3% at 90.38$/bbl
• WTI MAY 24 up 0.4% at 85.71$/bbl
• Gasoil MAY 24 up 0.9% at 821.75$/mt
• WTI-Brent up 0.02$/bbl at -5.24$/bbl
• Israel’s war cabinet said that an attack of that magnitude can’t go unanswered with defence minister Gallant expressing that “Israel won’t accept an equation in which Iran responds with a direct attack every time Israel strikes targets in Syria”.
• China data showed Q1 growth beat expectations as apparent oil demand rose 1% to 14.75mb/d in March according to Bloomberg. March oil refining rose 1.3% y/y to a 5-month high as product stocks were rebuilt following the Lunar NY holiday and ahead of the April/May seasonal maintenance.
• US oil output from the main shale-producing regions will rise in May to a five-month high, according to the EIA’s monthly drilling report.
  • Brent JUN 24-JUL 24 up 0.02$/bbl at 0.87$/bbl
  • Brent JUN 24-DEC 24 up 0.08$/bbl at 4.81$/bbl
• Crude time spreads regained ground yesterday after a recent pull back as curve backwardation remains strong reflecting the tight supplies during Q2 amid OPEC+ supply cuts.
• US diesel and gasoline cracks fell yesterday with the diesel spreads falling to the lowest since about June 2023. Gasoline cracks were down with a decline in weekly gasoline demand but is net higher this month supported by tight market expectations towards the summer driving season.
  • US gasoline crack down 0.1$/bbl at 31.43$/bbl
  • US ULSD crack up 0$/bbl at 26.08$/bbl