Crude Resumes Decline Amid Demand Concerns and Gaza Ceasefire Optimism

Crude markets have resumed the decline from yesterday triggered by headlines suggesting optimism for a ceasefire between Israel and Hamas, which were later withdrawn. The US dollar has strengthened after the latest US payrolls data showed stronger than expected data suggesting lower rates cuts this year.

• US Jan nonfarm payrolls +353k vs 170k est and Unemplyment Rate 3.7% vs 3.8%.
• Total Unrounded AHE: M/M (SA): 0.553% in Jan from 0.38% in Dec (initial 0.44%),Y/Y (SA): 4.475% in Jan from 4.311% in Dec
• Slower global demand growth this year has helped to limited upside pressure from Middle East escalation risks and Red Sea tanker diversions. The US Fed this week signalled openness to cutting, but was in no rush to ease while China data has again been weak despite new property support measures.
• Technicals suggest the reversal lower undermines the recent bullish theme with next Brent support at Jan 17 low of 76.13$/bbl and resistance up at Jan 29 high of 84.17$/bbl.
• Time spreads are holding steady today with the prompt WTI spread near parity after seeing a correction lower yesterday.
  • Brent APR 24 down -0.6% at 78.23$/bbl
  • WTI MAR 24 down -0.7% at 73.32$/bbl
  • WTI MAR 24-APR 24 down -0.01$/bbl at 0.02$/bbl
  • WTI JUN 24-DEC 24 down -0.06$/bbl at 2.23$/bbl