Crude Markets Weigh Middle East Risks and Demand Concern

Crude front month is holding steady today as the market assesses the Middle East conflict escalation risks and increasing attacks on Russian energy infrastructure against demand concerns amid a weak property sector in China.

• Brent MAR 24 up 0.1% at 82.46$/bbl
• WTI MAR 24 up 0.2% at 76.91$/bbl
• Gasoil FEB 24 up 0.4% at 857.75$/mt
• WTI-Brent up 0.01$/bbl at -5.52$/bbl
• Markets are waiting for the US response following the attack on its troops stationed in Jordan over the weekend while negotiators are working on a “three-phase” ceasefire between Israel and Hamas including the release of hostages.
• Focus this week is also on OPEC+ ahead of the JMMC meeting on Thursday as the group appears to be making a slow start to its new output cuts, according to Kpler.
• Saudi Aramco has been asked by the government to maintain production capacity at 12mb/d and not raise up to 13mb/d as previously planned by 2027.
• The US is set to review oil sanctions on Venezuela’s energy sector if the country upholds its ban on opposition candidates running in the presidential election, according to Bloomberg.
  • Brent MAR 24-APR 24 down -0.03$/bbl at 0.54$/bbl
  • Brent JUN 24-DEC 24 down -0.06$/bbl at 2.61$/bbl
• Time spreads have softened slightly from gain last week although the curve remains in backwardation. The Brent second month call-put skew has been holding between about -2.65% and -2.1% since the middle of Jan.
• Diesel cracks are maintaining gains seen last week amid supply risks due to Middle East conflict and limited by refinery outages ahead of seasonal maintenance.
  • US gasoline crack down -0.3$/bbl at 18.06$/bbl
  • US ULSD crack down -0.1$/bbl at 40.63$/bbl