Crude Holds Within $2.5/bbl Range With Supply Risks and OPEC+ in Focus

Crude markets are holding steady after a recovery yesterday from a low of $84.58/bbl with front month bouncing in a $2.5/bbl range in the past ten days. Focus remains on Middle East tensions and Russia energy infrastructure strikes while watching for any indications of future OPEC+ plans ahead of the JMMC meeting next week.

• Brent JUN 24 up 0.3% at 85.7$/bbl
• WTI MAY 24 up 0.4% at 81.71$/bbl
• Gasoil APR 24 up 0.2% at 815$/mt
• WTI-Brent down 0.03$/bbl at -4.66$/bbl
• OPEC+ is unlikely to make any output policy changes until the next full OPEC+ ministerial meeting in June. Delegates view current supply curbs as effective according to Bloomberg sources ahead of a review meeting next week.
• EIA weekly oil data yesterday showed a 3.17mbbl build in US crude stocks with a dip in exports and higher imports offsetting an increase in refinery runs. US production maintained at 13.1mbpd while refinery utilisation once again rose more than expected up to 88.7%.
• The US said it destroyed 4 Houthi drones that were targeting a warship in the Red Sea.
  • Brent JUN 24-JUL 24 up 0.03$/bbl at 0.73$/bbl
  • Brent JUN 24-DEC 24 up 0.11$/bbl at 4.11$/bbl
• Expectation of a market deficit in Q2 due to tighter supply and potential Fed easing this year continue to support crude backwardation. The Brent Jun24-Dec24 time spread is holding over $4/bbl having rallied from below $1/bbl in December.
• Gasoline cracks have found some support after a drop yesterday driven by an unexpected build in US gasoline stocks and with implied demand increasing at a slightly slower rate than seen in previous weeks.
  • US gasoline crack down 0.1$/bbl at 30.77$/bbl
  • US ULSD crack down 0.1$/bbl at 27.56$/bbl