Mid-Day Oil Summary: Crude Edges Lower

Crude prices are edging down but recouped some of the earlier losses. Upside is limited after the USD index has cleared to weekly highs today and is narrowing the gap with mid-February highs.

• Brent MAY 24 down 0.1% at 85.7$/bbl
• WTI MAY 24 down 0.1% at 81$/bbl
• The reduction in Russian refining rates due to the latest Ukrainian drone attacks could raise Russian seaborne crude flows by 200-250kbpd to 3.7-3.8mbpd according to Kpler estimates.
• The US has urged Ukraine to halt attacks on Russian energy infrastructure, as the latest drone attacks on oil refineries have been driving up oil prices, sources told the FT.
• Ukraine's Euro-Atlantic integration minister said on Friday that Russian oil refineries were legitimate targets for Ukraine's forces.
• All of India’s refiners are now refusing Russian oil delivered on PJSC Sovcomflot tankers due to US sanctions according to Bloomberg sources.
• The Sovcomflot sanctions issue means there are fewer tankers to deliver Russian crude, which has led to discounts for the nation’s oil narrowing to compensate for higher freight costs according to Bloomberg sources.
• Physical crude markets in Europe and Africa are weaker due to refinery maintenance and extra supply from the US and Saudi Arabia according to Reuters sources.
• A second cargo of Access Western Blend has been sold to an APAC buyer this week as Canada’s Trans Mountain Expansion nears completion.
• The US Department of Energy is seeking to buy 1.5mbbl sour crude oil for delivery into the Strategic Petroleum Reserve in September, according to a document on March 21.
• The Russian oil and gas industry does about 80% of its business in rubles and yuan according to Deputy Prime Minister Alexander Novak.
• The Iraqi federal government is still studying the proposed amendment to the federal budget that would allow Baghdad to pay international oil companies that are operating in the Kurdistan region, Iraq’s oil minister Hayyan Abdul Ghani said.
• Russian refinery throughput from March 13-20 fell by 7.5% vs March 1-14, dropping to 5 mn bpd after a series of Ukrainian drone strikes hampered processing rates according to Reuters calculations on industry sources data.
• Russian primary crude processing volumes are expected to decline by 300-400kbpd to an average of 5-5.2mbpd, data from a Bloomberg survey of analysts showed.
• Chinese independent refineries gasoline and gasoil production was at a three year high in Q1 2024 with a combined production of 33.47 million tonnes year-to-date as of March 21 - up 3.74% y/y according to OilChem data.
• ExxonMobil’s Gravechon refinery in France is running at 50% after a fire last week according to Exxon France CEO Charles Amyot on LinkedIn this week.
• US diesel crack spreads have found some support today after seeing a steady decline all week amid concerns for weak demand and with a recovery in US refinery utilisation. The front month spread has fallen from $34.85/bbl on Mar.18 to a low of $29.6 yesterday.
  • US gasoline crack up 1.3$/bbl at 32.97$/bbl
  • US ULSD crack up 0.5$/bbl at 30.45$/bbl