Geopolitical Tensions Stoke Crude Markets Friday

Oil markets are gaining traction again Friday as geopolitical tensions rise after the US military attacks two Syria based facilities it says are linked to Iran, sparking fears of wider Middle East tension.

• Brent DEC 23 up 1.6% at 89.34$/bbl
• WTI DEC 23 up 1.6% at 84.54$/bbl
• Gasoil NOV 23 up 0.2% at 890.25$/mt
• WTI-Brent down -0.02$/bbl at -4.8$/bbl
• Spurring tensions, Iran said the US won’t be unaffected if the conflict widens.
• Crude prices have ebbed back and forth this week on Israel related headlines, selling off on signs of ceasefire and delayed ground offensives and rising on the opposite. Israel remains committed to a ground offensive at present.
• Physical crude markets have been more reflective of underlying economic weakness, a factor adding as another drag on oil at present, with signs of weak economic demand such as poor refined fuel demand figures in Europe and crude stockpile builds in the US. Physical barrels of sweeter grades like WTI are also being impacted by its high gasoline yield.
• Despite the gain Friday, WTI and Brent are on track to post their first weekly drop in three weeks with no actual impact to oil supply because of Middle East tension yet with the main concerns pointed at Iranian barrels which are leaving at a sanctioned record pace this year – mainly to China.
• Brent DEC 23-JAN 24 up 0.12$/bbl at 1$/bbl
• Brent DEC 23-DEC 24 up 0.53$/bbl at 6.78$/bbl
• Goldman Sachs analysts have kept their first quarter 2024 Brent crude price forecast at $95 a barrel but added that lower Iranian exports could cause baseline prices to rise by 5%.
• Overall weaker gasoline crack prices in the US are filtering through to the pump as the US average crosses the $3.49/gal mark this week. US gasoline demand remains lackluster on a seasonal basis.
• Valero, one of the biggest US refiners, plans to run its 14 US refineries at 96.5% in Q4 it said yesterday, up from 95% in Q3 – a more bullish signal despite signs of economic malaise. The company noted significant exports to Latin America.
• US gasoline crack down 0$/bbl at 10.84$/bbl
• US ULSD crack down -0.2$/bbl at 40.65$/bbl