Crude Steadies After Fall Yesterday

Crude steadies after a 2.5$/bbl drop yesterday driven by weak global demand sentiment, a reduction in Saudi OSPs and strong non-OPEC supply while fund net long positions fell last week.

• Brent MAR 24 up 0.3% at 76.38$/bbl
• WTI FEB 24 up 0.2% at 70.92$/bbl
• Gasoil JAN 24 up 1.3% at 760.25$/mt
• WTI-Brent down -0.07$/bbl at -5.32$/bbl
• Tensions in the Middle East and a force majeure at Libya’s Sharara oilfield have provided some support with front month crude holding above the lows of the year from Jan 3.
• The market will look to the EIA Short Term Energy Outlook due today for clarity on the current market balance and expectations for the rest of the year. OPEC oil output rose in December driven by increases in Angola, Iraq and Nigeria to offset cuts by other member including Saudi Arabia according to a Reuters survey last week.
• An oil price range of $75/bbl to $80/bbl is expected in the near term according to DBS Bank via Reuters, "barring an unforeseen flare up in the Middle East situation."
  • Brent MAR 24-APR 24 up 0.04$/bbl at 0.25$/bbl
  • Brent JUN 24-DEC 24 up 0.05$/bbl at 1.58$/bbl
• Crude time spreads followed the bearish move yesterday with the WTI contango strengthening again after the gains back towards parity seen last week although the prompt Brent spread is holding a narrow backwardation.
• US gasoline cracks saw volatile trading yesterday ranging between about $14/bbl and $15.1/bbl with overall demand still weak and stock levels above normal despite data suggesting higher demand on the week.
  • US gasoline crack down -0.1$/bbl at 14.66$/bbl
  • US ULSD crack down -0.1$/bbl at 37.73$/bbl