Crude Extends Pull Back on US Crude Inventory Build

Crude extends the decline from yesterday following the much larger than expected US crude inventory build in the weekly EIA data driven by a further drop in refinery runs and softer product demand.

• Crude had earlier tested recent range highs with Middle East risks and OPEC+ cuts offsetting offset global demand concern and the shift in Fed rate prices to a higher for longer view.
  • Brent APR 24 down -0.2% at 81.42$/bbl
  • WTI MAR 24 down -0.3% at 76.42$/bbl
  • Gasoil MAR 24 down -1.4% at 845$/mt
  • WTI-Brent down -0.04$/bbl at -5.25$/bbl

• US crude inventories built with a drop in refinery runs for the sixth straight week to the lowest since Dec 2022 amid the continued outage at BP’s Whiting refinery.
• The oil Ministries of both Kazakhstan and Iraq said Feb. 14 that they will compensate for its overproduction in January over the next four months, as part of its OPEC+ obligations.
• IEA said earlier this week that a comfortable oil market and a moderate price evolution is expected throughout 2024 amid increasing supply and weaker demand growth. The latest IEA monthly oil report is due out today.
  • Brent APR 24-MAY 24 down -0.03$/bbl at 0.58$/bbl
  • Brent JUN 24-DEC 24 down -0.06$/bbl at 2.58$/bbl
• Near term time spreads were also softer yesterday but the Brent and WTI curves remain in backwardation suggesting tight market conditions.
• Gasoline and diesel cracks spreads also fell yesterday after a drop in US implied demand. Gasoline four week implied demand showed a counter seasonal fall after the gains seen the previous week. Weekly distillates demand fell to keep the four week average below the previous five year range for the time of year.
  • US gasoline crack down -0.4$/bbl at 20.1$/bbl
  • US ULSD crack up 0$/bbl at 41.04$/bbl