Crude Steady as Strong Supply Set Against Middle East Risks

Crude is holding steady today with support from a weaker US dollar and ongoing risks from Middle East tensions weighed against strong supplies after US API crude inventories showed another build.

• Brent MAR 24 down -0.1% at 79.49$/bbl
• WTI FEB 24 down -0.2% at 73.98$/bbl
• Gasoil JAN 24 down -0.9% at 771.75$/mt
• WTI-Brent down -0.05$/bbl at -5.64$/bbl
• Shipping in the Red Sea region remains a risk forcing tankers to divert on longer routes despite a US led task force to protect the route although major shipping firms such as Maersk and CMA CGM were resuming passage through the Red Sea.
• Sinopec expects China’s product demand growth to ease to 1.7% in 2024 from 16.1% in 2023, which had been boosted by post-Covid demand, according to Bloomberg. Gasoline is forecast at 1.6% compared with 23% and diesel flat vs 3.1%. Demand for refining should increase 3% after 10% this year. The peak in crude demand is forecast for 2027.
  • Brent MAR 24-APR 24 down -0.03$/bbl at 0.1$/bbl
  • Brent JUN 24-DEC 24 down -0.08$/bbl at 1.74$/bbl
• Prompt crude time spreads are slightly softer again today after falling back yesterday from the highest since early December. The WTI spreads remains in contango while the Brent spread is maintaining a narrow backwardation.
• Gasoline crack spreads are edging higher ahead of the updated EIA stocks data while diesel is steady after falling to the lowest since mid July yesterday. US retail gasoline demand saw a decrease of 0.2% last week but was 1.1% above the average of the last four weeks at 8.518m b/d according to GasBuddy.
  • US gasoline crack up 0.2$/bbl at 16.86$/bbl
  • US ULSD crack up 0$/bbl at 35.37$/bbl