Crude Market Weighs Possible OPEC+ Cut Extension Against US Stocks Build

Crude futures are holding steady today after a net decline yesterday following a WTI peak at just over 79.6$/bbl as crude backwardation strengthens. Market focus has switched to upside risks with a possible OPEC+ cut extension widely expected in early March and with ongoing Red Sea shipping disruption.

• Brent MAY 24 down -0.3% at 81.89$/bbl
• WTI APR 24 down -0.3% at 78.32$/bbl
• Gasoil MAR 24 down -0.5% at 815.5$/mt
• WTI-Brent down -0.09$/bbl at -5.05$/bbl
• Oil weakened late yesterday following another build in US crude stocks according to the latest weekly EIA data amid concerns for slow demand while signs of delayed US interest rate cuts added to the downside pressure.
• It was too soon to say if OPEC+ voluntary output cuts would be extended said Russia’s Deputy Prime Minister Alexander Novak said earlier this week, according to Interfax.
• EIA crude stocks rose for a fifth week by 4.2mbbl while refinery utilisation remains low but shows signs of recovery with a 0.9% increase to 81.5%. Gasoline fell -2.83mbbl and distillate -0.51mbbl.
  • Brent MAY 24-JUN 24 up 0.01$/bbl at 0.69$/bbl
  • Brent JUN 24-DEC 24 down -0.02$/bbl at 3.44$/bbl
• The prompt crude time spread traded at the highest since October while the Jun24-Dec24 spreads are at the highest since September suggesting a tightening of the market.
• Gasoline and distillate cracks weakened taking US distillate cracks to the lowest levels since July. The latest weekly EIA oil data showed an increase in US gasoline implied demand but a drop in distillates implied demand on the week but both in line with seasonal trends.
  • US gasoline crack down -0.1$/bbl at 28.25$/bbl
  • US ULSD crack down -0.3$/bbl at 31.42$/bbl