Crude Steadies After Gains on Further Red Sea Attacks Yesterday

Crude markets are holding steady today after gains yesterday with global demand uncertainty driven by China and US set against geopolitical risks while uncertainty surrounds OPEC+ commitment to production cuts. A cut to the EIA US production forecast for this year helped ease concerns about potential oversupply.

• Brent APR 24 down -0.1% at 78.54$/bbl
• WTI MAR 24 unchanged at 73.31$/bbl
• Gasoil FEB 24 up 0.3% at 844$/mt
• WTI-Brent unchanged at -5.2$/bbl
• Support continues to come from further Red Sea attacks after US Central Command reported that six missiles were fired by Houthis at shipping yesterday. The number of oil tankers diverting around the cape of Good Hope continues to rise. Negotiators are still pushing for a ceasefire deal for Gaza. Qatar said that a draft has been presented to Hamas and the response so far was “positive”.
• US crude oil production has been revised down 0.1m b/d to 13.11m b/d for 2024 according to the EIA’s short term energy outlook. Total global oil production is expected to grow by 0.6mb/d in 2024 to 102.30mb/d slowing from an increase of 1.8mb/d in 2023. Total global demand for liquid fuels in 2024 is seen up 1.4m b/d to 102.42mb/d.
  • Brent APR 24-MAY 24 unchanged at 0.32$/bbl
  • Brent JUN 24-DEC 24 down -0.02$/bbl at 2.21$/bbl
• The crude curve backwardation has regained some strength after softening last week. The WTI prompt spread has edged back towards parity although still holds a narrow contango.
• Gasoline and diesel cracks spreads continue to trend higher with support from tighter supplies and refinery outages to help offset uncertainty over demand. API data yesterday showed another build in gasoline stocks while distillates inventories fell on the week.
  • US gasoline crack down -0.1$/bbl at 19.57$/bbl
  • US ULSD crack up 0$/bbl at 42.33$/bbl