Mid-Day Oil Summary: Crude Edges Higher

Crude ticks higher supported by ongoing Houthi threats on vessels in the Red Sea, weakness out of Dakota production due to the slow recovery from cold weather disruption and an escalation in attacks on Russian oil infrastructure by Ukraine. Oil had faced downside pressure earlier due to Libyan production.

• Brent MAR 24 up 0.4% at 78.88$/bbl
• WTI MAR 24 up 0.5% at 73.64$/bbl
• Libya’s NOC has lifted the force majeure at the 300kbpd Sharara oil field and will restart oil production and exports, NOC said in a statement on Sunday.
• US oil production has seen some recovery since late last week although production at North Dakota may need at least a month to restore normal output according to state officials.
• Russia’s Novatek has suspended some operations at the Ust-Luga export terminal on the Baltic Sea, following a fire on 21 January according to S&P Commodity Insights that was suspected to be caused by drone attack, Ukrainian media said, cited by Reuters.
• Russia surpassed Saudi Arabia as the largest crude oil supplier to China in 2023 with Russian imports up 24.1% on the year to a record 107.02m metric tons (2.14mbpd) according to Chinese customs data on Saturday.
• The natural resources ministry of the KRG has invited international oil companies operating in the region to a discussion on Wednesday to start resuming oil exports from the region according to Rudaw.
• Crude floating storage – stationary for at least 7 days – rose to 75.28mn bbls as of Jan 19, up by 2.35mn bbls or 3.2% from the week prior.
• Pemex’s Dos Bocas refinery, Mexico, will begin producing commercial fuel in the coming weeks and reach max capacity by the end of March according to its CEO Octavio Romero Oropeza via X on Saturday.
• Russian oil processing volumes declined to 5.5mbpd during 11-17 January, down by around 11kbpd from the average volumes during the first ten days of January, due to the loss in output of Lukoil’s Norsi refinery, a person with knowledge of the data told Bloomberg.
• At least 39.5m mtpa of capacity is set to go offline between March-May among domestic Chinese refineries, according to OilChem.
• Diesel spreads have also eased back from highs last week with warmer weather in US helping to ease refinery outages and with ongoing concern for soft demand. Gasoline however is still in an upward trend since Jan 8 but remains low compared to levels seen prior to September.
• US gasoline demand fell 6.1% last week (Sun-Sat) vs the week prior and was 6.9% below the four-week average.
  • US gasoline crack up 0.5$/bbl at 18.03$/bbl
  • US ULSD crack down -0.1$/bbl at 38.23$/bbl