Crude Edges Lower After Softer Than Expected China Growth

Crude ticks lower today with concerns for economic growth in China and a stronger US dollar offsetting the supply risks from Red Sea disruptions and Libya. Crude has traded with no clear direction this year having bounced between 74.79$/bbl and 80.75$/bbl as global crude supplies so far do not appear to have been impacted by the shipping diversions.

• Brent MAR 24 down -1% at 77.53$/bbl
• WTI FEB 24 down -1.1% at 71.59$/bbl
• Gasoil FEB 24 down -2% at 778.25$/mt
• WTI-Brent down -0.04$/bbl at -5.81$/bbl
• China’s economy showed a below expectation growth of 5.2% in Q4. China crude processing in December rose 1.1% to 60.11 tons as processing in 2023 reached a record up 9.3% y/y to 734.78m tons amid post covid demand. Apparent oil demand rose 11% to 14.42mb/d according to Bloomberg.
• Short term supply risks were partly eased with the resumption of loadings at the CPC oil terminal in the Black Sea after a storm halted operations.
• Updated monthly oil reports from OPEC today and IEA tomorrow may help to give clarity to the balance in 2024 and whether the OPEC+ output cuts can offset a potential market surplus.
  • Brent MAR 24-APR 24 up 0.01$/bbl at 0.43$/bbl
  • Brent JUN 24-DEC 24 down -0.12$/bbl at 1.74$/bbl
• Crude time spreads are edging higher with the Brent prompt spread at the highs from last week, but the prompt WTI spread remains in contango.
• US diesel and gasoline cracks erased gains yesterday after an earlier surge after confirmation that operations at the Baywater refinery are not disrupted. Separate refinery outages, higher gasoline demand, and severe cold weather in the US this week have been adding support.
  • US gasoline crack down -0.1$/bbl at 16.95$/bbl
  • US ULSD crack down 0$/bbl at 39.3$/bbl