Crude Steady After Futures and Spreads Rallied Yesterday

Oil prices are holding near previous close levels after net gains in volatile trading yesterday amid a stronger US dollar and increased hopes of a Fed cut. Front month Brent bounced between about $86/bbl and $88.5/bbl yesterday.

• Brent JUN 24 up 0.2% at 88.59$/bbl
• WTI JUN 24 up 0.2% at 83.53$/bbl
• Gasoil MAY 24 up 0.4% at 787.5$/mt
• WTI-Brent unchanged at -5.05$/bbl
• The US extended sanctions on Iran’s oil sector to include foreign ports, vessels and refineries that knowingly process or ship Iranian crude; analysts don’t expect the new measures to have a material impact on Iran’s crude exports.
• An unexpected draw in US crude stocks in API data yesterday added to the upside support ahead of the update weekly EIA petroleum inventory data later today.
• Backwardation continues to strengthen with the prompt time spread trading back up to the highs seen in early April supported by a market deficit in Q2. Uncertainty surrounds the market balance into H2 with many analysts expecting OPEC+ to start to return some additional supply later this year.
  • Brent JUN 24-JUL 24 up 0.02$/bbl at 1.05$/bbl
  • Brent JUN 24-DEC 24 up 0.07$/bbl at 4.91$/bbl
• Diesel cracks drifted lower yesterday to resume the bearish trend and reversing some of gains from the previous day with soft demand and building stocks weighing on prices. Gasoline cracks found support yesterday ahead of an expected US inventory draw with another increase in demand expected last week. API data yesterday showed a small decline in gasoline stocks and increase in distillates stocks.
  • US gasoline crack up 0.2$/bbl at 30.27$/bbl
  • US ULSD crack up 0.2$/bbl at 25.18$/bbl