Crude Edges Up Amid Bearish Trend Ahead of US Payrolls

Crude futures have rebounded nearly 2$/bbl after reaching the lowest since late June yesterday ahead of the US nonfarm payrolls data today as Iraq is the latest OPEC member to confirm commitment to pledged cuts. Despite the recovery the trend from the last couple of weeks remains bearish on oversupply concerns with OPEC+ voluntary cuts not enough to offset the stronger non-OPEC supply.

• Brent FEB 24 up 2% at 75.55$/bbl
• WTI JAN 24 up 2% at 70.7$/bbl
• Gasoil DEC 23 up 0.7% at 774$/mt
• WTI-Brent down -0.12$/bbl at -4.61$/bbl
• Global demand growth uncertainty is also weighing on markets as US recession concerns persist and a Bloomberg survey expects China’s crude consumption to grow a third less than this year at 500kbpd in 2024.
• There is risk of the reapplication of sanctions on Venezuela's oil sector following what appears to be non-compliance with the terms of the deal struck in October while Venezuela has given oil producers in Guyana 90 days to cease operations in the disputed Essequibo province and its waters.
  • Brent FEB 24-MAR 24 up 0.05$/bbl at -0.14$/bbl
  • Brent JUN 24-DEC 24 up 0.19$/bbl at 1.03$/bbl
• A reduction in the bearish crude call-put skew in the last week suggests some limited support from the voluntary OPEC+ cuts while most of the crude curve is holding onto a relatively narrow backwardation. Near term time Brent spreads are however in contango until April with WTI contango until June.
• Gasoline and diesel cracks have steadied after trading lower yesterday with ongoing weakness in seasonal demand and robust US inventories continue to weigh on the spreads.
  • US gasoline crack up 0.2$/bbl at 14.86$/bbl
  • US ULSD crack up 0.2$/bbl at 38.17$/bbl