Crude Markets Heading for Net Weekly Gain Despite Demand Concern

Crude markets are edging higher today after a rally late yesterday as a reversal downwards in US dollar offered support and despite weaker than expected US GDP numbers putting pressure on the oil demand outlook.

• Brent JUN 24 up 0.6% at 89.5$/bbl
• WTI JUN 24 up 0.5% at 83.99$/bbl
• Gasoil MAY 24 up 1.9% at 788.5$/mt
• WTI-Brent down 0.06$/bbl at -5.51$/bbl
• The geopolitical risk premium has fallen from last week as Middle East tensions have eased allowing market focus to switch back more towards market fundamentals and global demand growth.
• The US may leverage new Iran sanctions to pressure Chinese buyers to cut Iranian oil purchases, but measures are unlikely to have a near-term impact: Platts.
• Russia, which has pledged to deepen its OPEC+ crude operation cuts in Q2, kept the numbers of its inactive oil wells nearly flat by end-March, Bloomberg said.
• Backwardation has strengthened this week to reverse a dip in time spreads in mid April. The prompt Brent time spread is trading at the highest since February supported by a market deficit in Q2.
  • Brent JUN 24-JUL 24 up 0.08$/bbl at 1.32$/bbl
  • Brent JUN 24-DEC 24 up 0.15$/bbl at 5.21$/bbl
• Diesel cracks yesterday resumed the declining trend amid poorer US economic signals, coupled with weaker demand in recent EIA data. A drop in diesel returns is prompting some refiners in Asia to make modest reduction in processing rates, according to Bloomberg.
  • US gasoline crack up 0.2$/bbl at 31.63$/bbl
  • US ULSD crack up 0.3$/bbl at 24.36$/bbl