Crude Holds in $3/bbl Range Amid Offsetting Risks

Crude markets are holding steady after a decline on Friday to maintain front month Brent in the $80.7 to 84$/bbl range since Feb. 9 ahead of International Energy Week in London. The market is assessing the risk from strong US and non-OPEC supply and concerns of weak demand in US and China against a potential for an extension to OPEC+ supply cuts amid ongoing geopolitical risks.

• Brent APR 24 down -0.2% at 81.43$/bbl
• WTI APR 24 down -0.3% at 76.23$/bbl
• Gasoil MAR 24 down -0.7% at 827.25$/mt
• WTI-Brent down -0.05$/bbl at -5.2$/bbl
• OPEC will announce in early March if it will extend production cuts into Q2, which is widely expected. Goldman Sachs doesn’t expect the reductions to be eased until Q3.
• January US PCE inflation data due this week will also be in focus with concern for demand if data shows higher than expected and suggests further delays to Fed cuts.
• On Saturday a US tanker was targeted but not struck by Houthi rebels in the Gulf of Aden. The US and UK hit 18 Houthi sites in Yemen the same day.
• Strong travel in China over the Lunar New Year holiday has driven an increase in demand supporting crude purchases by refiners ahead of expected maintenance during Q2.
  • Brent APR 24-MAY 24 up 0.04$/bbl at 0.86$/bbl
  • Brent JUN 24-DEC 24 up 0.01$/bbl at 3.01$/bbl
• Diesel and gasoline crack spreads are stable and finding some support late last week after the pull back seen in mid February. The US is set to have a second, smaller refinery maintenance period peak in April, following the spring maintenance which peaked in February, according to IIR Energy, cited by Bloomberg.
  • US gasoline crack up 0$/bbl at 28.72$/bbl
  • US ULSD crack down -0.2$/bbl at 34.24$/bbl