Mid-Day Oil Summary: Crude Edges Lower

Crude markets are trading lower today after the front-month rallied to the highest since November on Thursday. Ongoing Middle East tensions and the escalation in attacks on Russia’s energy infrastructure by Ukraine are supportive, combined with a US crude inventory draw this week and potential additional China stimulus plans.

• Brent MAR 24 down -0.5% at 82.03$/bbl
• WTI MAR 24 down -0.8% at 76.74$/bbl
• The Mar24 Brent options expire against the 19:30BST futures close price today with the main strikes of note at 80$/bbl and 85$/bbl.
• The UK Maritime Trade Operations reported two missile attacks South West Of Aden on Friday. No vessels have been hit by the attacks, according to a report.
• Saudi Aramco is continuing to send oil cargoes through the Red Sea despite the recent security concerns driven by Houthi rebel attacks on vessels passing the waters.
• OPEC+ is not expected to decide on production volumes from April onwards at the next JMMC meeting on 1 February, but the group is likely to announce a decision in the coming weeks, five OPEC+ sources told Reuters.
• Venezuelan President Nicolas Maduro warned on Thursday that plans with the political opposition to hold elections later this year are in danger of collapse, a move which could risk US energy sanctions relief.
• Global crude inventories fell by 24m barrels last week amid supply disruptions in the US, Libya and Kazakhstan and Red Sea diversions according to Macquarie.
• The Iraq-Turkey oil pipeline is still being held up by disagreements with oil companies, while Iraq has been significantly overshooting its OPEC+ quota in recent months, despite lower output from the Kurdistan region.
• Gasoline supply for the Russian domestic market is stable despite the shutdown of a unit at Lukoil’s NORSI refinery and prices at filling stations are not rising Deputy PM Alexander Novak said.
• European imports of diesel are expected to decline sharply in the first half of February to 450kbpd, Pamela Munger, Vortexa Analyst said.
• Diesel cracks saw some support yesterday on tighter supply concerns after drifting lower over the previous week amid soft demand. EIA this week showed the four week average implied distillates demand was still below the previous five year range despite a small gain on the week.
  • US ULSD crack down 0$/bbl at 38.82$/bbl