Crude Rises Towards Jan Highs After US/UK Strikes to Houthi Targets

Crude has risen towards the highs of the year so far of 79.41$/bbl after joint US/UK military strikes in Yemen targeting the Houthis in response to attacks on commercial ships by the Houthis over recent months.

• Brent MAR 24 up 2.1% at 79.01$/bbl
• WTI FEB 24 up 2.1% at 73.54$/bbl
• Gasoil FEB 24 up 1.3% at 795$/mt
• WTI-Brent down -0.06$/bbl at -5.39$/bbl
• The US & UK authorities have stated the strikes aren't designed to escalate tensions amid risks of and escalation in conflict to the wider region and Iran involvement.
• China crude import volumes rose to 48.36m tons in Dec resulting in a record year for imports in 2023 as the country emerged from Covid restrictions. Oil demand in China is considered a key to global growth this year amid uncertainty over a slowdown in 2024. China oil product demand was late last year estimated at 1.7% in 2024 compared to 16% in 2023 according to Sinopec.
  • Brent MAR 24-APR 24 up 0.07$/bbl at 0.37$/bbl
  • Brent JUN 24-DEC 24 up 0.18$/bbl at 1.88$/bbl
• Near term crude time spreads continue to rally driven by the Middle East and Libya supply risks. The WTI prompt spread is holding a narrow contango after briefly trading in backwardation several times this week while the Brent spread is up to 0.36$/bbl from near parity at the start of the year.
• Diesel and gasoline cracks continue to rise this week boosted by refinery outages and risks from colder weather in the US. A recovery in EIA weekly implied demand this week has added to the gains while distillates stocks are still below normal despite large recent builds.
  • US gasoline crack up 0.3$/bbl at 17.17$/bbl
  • US ULSD crack up 0.8$/bbl at 40.98$/bbl