Crude Holding Gains with Focus on Middle East

Crude markets are holding just above previous close levels with Middle East uncertainty and tight supply expectations. Signs of a softer landing, particularly in the US and an improvement in Chinese manufacturing activity last week are aiding global demand expectations.

• Brent JUN 24 up 0.2% at 90.52$/bbl
• WTI MAY 24 up 0.1% at 86.54$/bbl
• Gasoil APR 24 up 0.3% at 853.75$/mt
• WTI-Brent up 0.03$/bbl at -4.85$/bbl
• Near term developments remain focused on Middle East geopolitical risks. There are conflicting views around the progress of Israel/Hamas peace talks from both sides. Israel suggested cautious optimism of progress on a Gaza ceasefire deal but wires reported that Hamas rejected the proposal.
• Iran's potential response to a suspected Israel attack on its consulate in Syria last week remains an upside price risk. Conflicts in the Middle East over the last six months have not threatened oil supplies but the market has remained alert to risks that Iran becomes directly involved and impacts its crude flows.
  • Brent JUN 24-JUL 24 up 0.02$/bbl at 1.02$/bbl
  • Brent JUN 24-DEC 24 up 0.03$/bbl at 5.35$/bbl
• Crude time spreads are holding onto gains seen over the last couple of weeks while the near term crude options call skew has been supported by strong call options traded volumes. Managed money net long crude positions are also at the highest since early October.
• Cracks softened yesterday amid signs of falling US gasoline demand last week, while uncertainty surrounds Russia output due to refinery outages and is China expected to issue its second batch of refined oil export quotas totalling 18m mt.
  • US gasoline crack down 0.2$/bbl at 28.82$/bbl
  • US ULSD crack up 0$/bbl at 28.06$/bbl