Crude Ticks Higher Amid Supply Side Risks

Crude is ticking higher again today after gains yesterday driven by the supply side with reduced flows from Libya, risks from Middle East tensions and Red Sea disruption as well as OPEC+ output cuts.

• Brent MAR 24 up 0.4% at 77.92$/bbl
• WTI FEB 24 up 0.5% at 72.59$/bbl
• Gasoil JAN 24 up 0.9% at 779.75$/mt
• WTI-Brent down -0.04$/bbl at -5.28$/bbl
• Iran backed Houthi rebel attacks on commercial shipping continue despite the US led maritime force with one of the largest missiles and drones attacks to date in the Red Sea. The attacks highlight the ongoing risks to the route despite US military stating there were no damages from the attack.
• The latest EIA Short-Term Energy Outlook forecasts a narrow global supply deficit of 120kbpd in 2024 with a decline in US inventories by 4.1% in December. EIA forecast global liquid fuels consumption to increase 1.4mbpd in 2024.
• API data suggested another drop in US oil inventories last week ahead of the weekly EIA petroleum data later today.
  • Brent MAR 24-APR 24 up 0.03$/bbl at 0.36$/bbl
  • Brent JUN 24-DEC 24 up 0.01$/bbl at 1.83$/bbl
• The near term time spread have gained this week as the WTI prompt time spread briefly flipped into backwardation for the first time since Dec 1 yesterday. The longer dated Jun24-Dec24 spreads are holding withing a range seen since Dec 20.
• Diesel crack spreads have surged this week, reaching their highest level since mid-December despite API suggesting another build in US inventories. Support is being found from US refinery outages, with US CDU outages hitting their highest level since mid-November. Gasoline cracks are also rising today, after hitting their lowest levels since November earlier this week.
  • US gasoline crack up 0.3$/bbl at 15.47$/bbl
  • US ULSD crack up 0.2$/bbl at 39.14$/bbl