Crude Steadies After Gains Yesterday on Red Sea Shipping Risks

Crude prices are holding onto gains seen yesterday with concern about shippers diverting vessels away from the Red Sea. Growing disruption in the Red Sea after more vessel attacks by Yemen’s Iranian-backed Houthi rebels yesterday drove Brent front month to a high of 79.51$/bbl before easing back slightly later in the day.

• Brent FEB 24 up 0.1% at 78.06$/bbl
• WTI FEB 24 down -0.1% at 72.75$/bbl
• Gasoil JAN 24 down -0.5% at 781$/mt
• WTI-Brent down -0.15$/bbl at -5.29$/bbl
• Companies such as BP and Equinor diverting their cargoes has sparked fears for supply passing through the key chokepoint.
• The US has put together a new naval task force to patrol the troubled area and protect commercial vessels.
• Russia will extend its existing exports cuts by potentially 50kbpd or more in December, but uncertainty remains over OPEC+ member commitment to voluntary cuts planned for Q1.
  • Brent FEB 24-MAR 24 up 0.05$/bbl at -0.11$/bbl
  • Brent JUN 24-DEC 24 unchanged at 1.23$/bbl
• The Brent prompt spread is still in contango but back up to -0.11$/bbl from a low of -0.36$/bbl last week. The Jun24-Dec24 spread is up to the highest since Dec 6 as the shipping risks have added support although backwardation remains much weaker than levels seen in November amid concern for a global supply surplus.
• Diesel and gasoline crack spreads have followed the wider oil market rally and yesterday added to the gains from last week. US front month gasoline cracks is up to the highest since September and diesel is back to levels from late November.
  • US gasoline crack up 0.3$/bbl at 18.97$/bbl
  • US ULSD crack down 0$/bbl at 40.11$/bbl