Crude Markets Hold Gains Ahead of JMMC and EIA Data

Crude futures are holding recent gains ahead of the OPEC JMMC meeting and EIA stocks data today, after a Brent front month rally from below 82$/bbl on March 12 to a high of 89.32$/bbl yesterday. Rising geopolitical risks and the expectation of a market deficit in Q2 have driven futures through technical resistance levels to the highest since October.

• Brent JUN 24 up 0% at 88.96$/bbl
• WTI MAY 24 down 0.1% at 85.1$/bbl
• Gasoil APR 24 up 0.6% at 850.25$/mt
• WTI-Brent down 0.01$/bbl at -4.73$/bbl
• An OPEC+ monitoring committee meets today but is unlikely to recommend any oil output policy changes as the members hold the path to shore up production and keep prices high. Delegates said current quotas were appropriate and not all members have been committed to output cuts. A decision on whether to extend the cuts into Q3 is likely to be made in early June.
• The US DOE announced that it would not be purchasing 3mbbls of crude for the SPR for delivery in August/September as previously planned due to rising prices above the $79/bbl target.
  • Brent JUN 24-JUL 24 down 0.04$/bbl at 0.99$/bbl
  • Brent JUN 24-DEC 24 down 0.09$/bbl at 5.28$/bbl
• Crude time spreads have followed the move higher with a steepening backwardation although both the prompt spread and Jun24-Dec24 spread have eased back slightly from highs yesterday.
• The crude options market is also reflecting the more bullish sentiment as the near term put skew has narrowed to parity for the first time since early November.
• Diesel and gasoline cracks spreads rallied yesterday with support from disruption to Russian exports to counter rising US refinery runs. US refinery rates are expected to rise again in data released later today after API data last night showed draws in crude, gasoline, and distillates stocks.
  • US gasoline crack up 0.2$/bbl at 31.12$/bbl
  • US ULSD crack down 0.1$/bbl at 28.95$/bbl