Mid-Day Oil Summary: Crude Edges Lower

Crude prices are edging lower with no clear direction as markets assess the future market balance after the OPEC+ members extended voluntary production cuts into Q2 to help counter a potential market surplus. Concern for demand in China continues to weigh on markets despite China’s pledge to transform the economy as the market watches for measures to stimulate growth.

• Brent MAY 24 down -0.2% at 82.62$/bbl
• WTI APR 24 down -0.4% at 78.44$/bbl
• HSBC forecasts an oil market deficit of above 1mbpd in the second and third quarter of this year, including the newly announced Russian output cuts and a partial unwinding of OPEC+ cuts starting from July, the bank said in a note.
• OPEC+ appears more unified for now after the group’s extension of the voluntary output cuts, RBC said in a note.
• Kazakhstan’s crude oil production in February fell by 0.9% on the month to 1.564mbpd, sources told Reuters, above its OPEC+ quota of 1.468mbpd.
• Kazakhstan is exploring exporting up to 2m mt of oil to Germany via the Druzhba pipeline in 2024, according to Energy Minister Almasadan Satkaliev.
• Physical WTI prices are strengthening with the return of US refineries from maintenance and after the OPEC+ extension to voluntary production cuts according to Bloomberg.
• The Reserve Bank of India has asked state owned refiners to push for at least 10% of oil payments to Persian Gulf suppliers in rupees in the next financial year according to Bloomberg.
• China’s Sinochem bought one VLCC of around 2mn barrels of CPC Blend for end-March to early-April loading, traders told Bloomberg, marking the third Asian VLCC purchase since Houthi rebel attacks stepped up in the Red Sea in November.
• Turkey’s Dortyol oil terminal will stop accepting Russian oil imports amid an increase in sanctions pressure by the US, operator GTS said, cited by Reuters.
• Spain’s Bilbao oil refinery is to shut down crude unit 2 on the afternoon of Tuesday 5 March according to a notice from operator Petronor.
• Repsol’s 135kb/d Puertollano refinery in Spain is undergoing at overhaul lasting 60 days which started on Monday Mar. 4.
• HPCL shut the 3mn tons CDU at the 9.5mn tons Mumbai refinery last week for scheduled maintenance for the duration of 45 days until mid-April according to company executives.
• Gasoline cracks are edging lower while diesel cracks are ticking higher as soft near term demand and signs of returning US refineries from outages are weighing on cracks while the upcoming transition to summer gasoline blend and rising demand into summer would be supportive.
  • US gasoline crack down -0.2$/bbl at 29.7$/bbl
  • US ULSD crack up 0.5$/bbl at 32.92$/bbl