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Crude Holds Steady After Losing Extra Risk Premium

OIL
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Crude is holding steady having lost much of the extra risk premium driven by the rising tensions between Israel and Iran last week. While the geopolitical risk premium linked to Middle East supply concerns is easing, conflict remains a focus for the market.

    • Brent JUN 24 up 0.2% at 87.19$/bbl
    • WTI JUN 24 up 0.2% at 82.06$/bbl
    • Gasoil MAY 24 up 0.6% at 783.75$/mt
    • WTI-Brent down 0.07$/bbl at -5.12$/bbl
  • The US extended sanctions on Iran’s oil sector to include foreign ports, vessels and refineries that knowingly process or ship Iranian crude but analysts don’t expect the new measures to have a material impact on Iran’s crude exports, according to Bloomberg. EU foreign ministers agreed in principle on Monday to expand sanctions on Iran.
  • Upside price pressure is also limited by global demand growth uncertainty and a possible delay to Fed cuts this year as the market watches for signs for future US monetary policy from the GDP and personal consumption data released later this week.
    • Brent JUN 24-JUL 24 up 0.01$/bbl at 0.94$/bbl
    • Brent JUN 24-DEC 24 up 0.04$/bbl at 4.53$/bbl
  • Near term crude options have now lost the call skew and back near parity reflecting the reducing upside risk pricing into the market. Crude time spreads however remain strong having regained ground yesterday supported by tight supply largely due to OPEC+ cuts during Q2.
  • Diesel cracks found support yesterday, likely boosted by disrupted Russian refinery operations but remain under pressure from weak near-term US demand. US refined product inventories likely fell again this week while crude stocks are expected to build according to a Reuters survey.
    • US gasoline crack up 0$/bbl at 29.91$/bbl
    • US ULSD crack down 0.1$/bbl at 25.94$/bbl
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Crude is holding steady having lost much of the extra risk premium driven by the rising tensions between Israel and Iran last week. While the geopolitical risk premium linked to Middle East supply concerns is easing, conflict remains a focus for the market.

    • Brent JUN 24 up 0.2% at 87.19$/bbl
    • WTI JUN 24 up 0.2% at 82.06$/bbl
    • Gasoil MAY 24 up 0.6% at 783.75$/mt
    • WTI-Brent down 0.07$/bbl at -5.12$/bbl
  • The US extended sanctions on Iran’s oil sector to include foreign ports, vessels and refineries that knowingly process or ship Iranian crude but analysts don’t expect the new measures to have a material impact on Iran’s crude exports, according to Bloomberg. EU foreign ministers agreed in principle on Monday to expand sanctions on Iran.
  • Upside price pressure is also limited by global demand growth uncertainty and a possible delay to Fed cuts this year as the market watches for signs for future US monetary policy from the GDP and personal consumption data released later this week.
    • Brent JUN 24-JUL 24 up 0.01$/bbl at 0.94$/bbl
    • Brent JUN 24-DEC 24 up 0.04$/bbl at 4.53$/bbl
  • Near term crude options have now lost the call skew and back near parity reflecting the reducing upside risk pricing into the market. Crude time spreads however remain strong having regained ground yesterday supported by tight supply largely due to OPEC+ cuts during Q2.
  • Diesel cracks found support yesterday, likely boosted by disrupted Russian refinery operations but remain under pressure from weak near-term US demand. US refined product inventories likely fell again this week while crude stocks are expected to build according to a Reuters survey.
    • US gasoline crack up 0$/bbl at 29.91$/bbl
    • US ULSD crack down 0.1$/bbl at 25.94$/bbl