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Mid-Day Oil Summary: Crude Erases Earlier Gains

OIL
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Crude markets erased earlier gains and extended losses throughout European morning trading hours amid a recovery in the USD Index off the post-Fed lows. Progress higher was aided by weaker-than-expected European PMIs, however contained yields have weighed on any further recovery.

    • Brent MAY 24 down 0.6% at 85.45$/bbl
    • WTI MAY 24 down 0.6% at 80.78$/bbl
  • Despite the recent upside pressure on crude futures prices the Brent second month ATM implied volatility has this week fallen to the lowest since early 2020 at 24.3% and WTI volatility is down at 26.6%.
  • Global oil demand so far this year has exceeded 2023 levels by 1.5mbpd, JP Morgan said in a note.
  • Red Sea shipping diversions are adding an extra 100,000 bpd to global bunker demand according to Vitol’s Chief Executive Officer Russel Hardy at CERAWeek.
  • The next few weeks will be crucial to finding out the start date of Canada's Trans Mountain Pipeline according to Trans Mountain’s Chief Financial and Strategy Officer Mark Maki this week.
  • Two people close to the Venezuela’s opposition candidate Maria Corina Machado were arrested this week, further complicating a narrowing chance of US energy sanctions being extended from April.
  • PetroChina's Guangdong Petrochemical complex in the southern Guangdong province will receive its first Venezuelan Merey crude cargo around 23 March, a source told S&P Commodity Insights.
  • Growing markets in the East will be able to “absorb” Russian oil supply as it relies on those markets as an outlet longer term according to Russian Foreign Minister Sergey Lavrov.
  • Angola is producing around 1.1mn bpd of crude at present – similar to its levels before leaving the OPEC alliance.
  • Indian crude oil imports in February declined by 6.6% on the year to 18.02mn tons, or 4.5mbpd, and also down by 16.8% on the month, Petroleum Planning and Analysis Cell data showed, due to Red Sea shipping disruptions, refinery maintenances, new sanctions on Russian oil and high imports in January.
  • Some South Korean refiners are adding diesel spot supplies for April to the market after several sale tenders concluded in the past week, tender documents showed, and sources told Reuters.
  • Indian oil products exports increased by 14.8% on the year in February to 5.8mn tons, or 1.57mbpd, while rising 20.1% above January levels, PPAC data showed.
  • Industrial action in Finland reduced exports from the country’s terminals and could further cut supply to filling stations if they continue, Neste said.
  • A record volume of Russian fuel oil is set to reach Asia in March to countries including China, India and Singapore, according to preliminary data from Kpler.
  • The prompt diesel time spread in Asia has fallen to the narrowest backwardation since last June amid strong China and South Korea supplies to the region according to Bloomberg.
  • Gasoline cracks found some support following the EIA data release showing a decline in gasoline inventories by 3.31mbbls. Diesel cracks continue to pull back after EIA data showed weekly implied demand increased but the four week average remains below the previous five year seasonal range.
    • US gasoline crack down 1.4$/bbl at 31.45$/bbl
    • US ULSD crack down 0.8$/bbl at 30.01$/bbl
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Crude markets erased earlier gains and extended losses throughout European morning trading hours amid a recovery in the USD Index off the post-Fed lows. Progress higher was aided by weaker-than-expected European PMIs, however contained yields have weighed on any further recovery.

    • Brent MAY 24 down 0.6% at 85.45$/bbl
    • WTI MAY 24 down 0.6% at 80.78$/bbl
  • Despite the recent upside pressure on crude futures prices the Brent second month ATM implied volatility has this week fallen to the lowest since early 2020 at 24.3% and WTI volatility is down at 26.6%.
  • Global oil demand so far this year has exceeded 2023 levels by 1.5mbpd, JP Morgan said in a note.
  • Red Sea shipping diversions are adding an extra 100,000 bpd to global bunker demand according to Vitol’s Chief Executive Officer Russel Hardy at CERAWeek.
  • The next few weeks will be crucial to finding out the start date of Canada's Trans Mountain Pipeline according to Trans Mountain’s Chief Financial and Strategy Officer Mark Maki this week.
  • Two people close to the Venezuela’s opposition candidate Maria Corina Machado were arrested this week, further complicating a narrowing chance of US energy sanctions being extended from April.
  • PetroChina's Guangdong Petrochemical complex in the southern Guangdong province will receive its first Venezuelan Merey crude cargo around 23 March, a source told S&P Commodity Insights.
  • Growing markets in the East will be able to “absorb” Russian oil supply as it relies on those markets as an outlet longer term according to Russian Foreign Minister Sergey Lavrov.
  • Angola is producing around 1.1mn bpd of crude at present – similar to its levels before leaving the OPEC alliance.
  • Indian crude oil imports in February declined by 6.6% on the year to 18.02mn tons, or 4.5mbpd, and also down by 16.8% on the month, Petroleum Planning and Analysis Cell data showed, due to Red Sea shipping disruptions, refinery maintenances, new sanctions on Russian oil and high imports in January.
  • Some South Korean refiners are adding diesel spot supplies for April to the market after several sale tenders concluded in the past week, tender documents showed, and sources told Reuters.
  • Indian oil products exports increased by 14.8% on the year in February to 5.8mn tons, or 1.57mbpd, while rising 20.1% above January levels, PPAC data showed.
  • Industrial action in Finland reduced exports from the country’s terminals and could further cut supply to filling stations if they continue, Neste said.
  • A record volume of Russian fuel oil is set to reach Asia in March to countries including China, India and Singapore, according to preliminary data from Kpler.
  • The prompt diesel time spread in Asia has fallen to the narrowest backwardation since last June amid strong China and South Korea supplies to the region according to Bloomberg.
  • Gasoline cracks found some support following the EIA data release showing a decline in gasoline inventories by 3.31mbbls. Diesel cracks continue to pull back after EIA data showed weekly implied demand increased but the four week average remains below the previous five year seasonal range.
    • US gasoline crack down 1.4$/bbl at 31.45$/bbl
    • US ULSD crack down 0.8$/bbl at 30.01$/bbl