Crude Holds Near February High on Geopolitical Risks

Crude is holding near the highest since late January after edging up yesterday in thin trading due to the US holiday. Ongoing Middle Eastern tensions and further Red Sea vessel attacks in recent days are outweighing concern for the pace of global demand growth with US rates potentially higher for longer and with ongoing China growth uncertainty.

• Brent APR 24 down 0% at 83.52$/bbl
• WTI APR 24 down -0.1% at 78.39$/bbl
• Gasoil MAR 24 up 0.1% at 855$/mt
• WTI-Brent up 0.06$/bbl at -5.12$/bbl
• Uncertainty over OPEC+ output cut commitment is helping limit upside although Iraq and Kazakhstan have stated plans to compensate for any excess oil output after reviewing production estimates. OPEC+ is expected to decide in early March whether to extend cuts into Q2.
• China is attempting to support the property market and economy with a larger than expected cut a benchmark reference rate for mortgages while tourism revenues rose during the Lunar New Year holiday.
• Sanctions on Russia are in focus again and stricter measures are expected from the EU on its oil and gas, including against Indian and Chinese firms that have contributed to Russia’s defence industry.
  • Brent APR 24-MAY 24 up 0.01$/bbl at 0.84$/bbl
  • Brent JUN 24-DEC 24 up 0.08$/bbl at 3.21$/bbl
• Crude time spreads are at the highest since October suggesting tight market conditions amid Red Sea tanker diversions. G7 transport ministers are going to hold an online meeting to discuss the situation in the Red Sea.
• Diesel cracks regained some ground yesterday after a steady decline since Feb 12 while gasoline cracks continued to drift lower back to start of the month levels.
  • US gasoline crack down -0.2$/bbl at 17.9$/bbl
  • US ULSD crack down -0.5$/bbl at 38.7$/bbl