Mid-Day Oil Summary: Crude on Track For Small Weekly Gain

Crude markets are edging higher today and are on track for a small weekly net gain this week supported by escalations in the Middle Eastern conflict and supply disruptions at Libyan oil fields.

• Brent MAR 24 up 0.6% at 78.02$/bbl
• WTI FEB 24 up 0.8% at 72.75$/bbl
• Saudi Aramco are expected to announce the crude OSP for February. Arab Light crude to Asia is forecast to fall by 1.7$/bbl from the previous month according to a Reuters survey.
• US nonfarm payrolls are due for release at 08:30 ET with consensus for 175k.
• The aggregate open interest in ICE Brent options has increased slightly compared to this time last month driven mainly but a rise in open call option positions. Calls option open interest is up to 1.50m as put positions hold relatively steady at 0.98m lots.
• Red Sea attacks show no signs of abating with 19 drones and missiles launched by Iranian-backed Houthis shot down by US-led force in the Red Sea in less than a month, according to the commander of the US Navy.
• Freight rates for key flows via the Red Sea have surged as attacks persist but remain unaffected on a global scale according to Vortexa.
• The West of Suez dirty tanker market on Jan. 4 saw a large jump in Suezmax rates amid several fixtures loading in WAF and the Black Sea, according to Platts.
• Chinese purchasing of Iranian oil has stalled as Tehran demands higher prices and in turn withholds shipments, which could squeeze margins for Chinese refiners, refinery and trade sources told Reuters.
• Protests have disrupted production at Libya’s Sharara oil field and likely also at the El Feel oil field this week.
• There are growing signs that Russia’s oil flows may be facing disruption following a ramp-up in US sanctions, according to Bloomberg.
• Cenovus Energy’s 160kb/d Toledo refinery in Ohio is planning a multiunit turnaround to begin in late September according to Bloomberg sources.
• Nigeria’s NNPC will complete test runs at the Port Harcourt refinery this month and will restart with an initial capacity of 60kbpd according to NNPC.
• Gasoline cracks are trending lower to reverse much of the gains seen over the previous two weeks after US distillates and gasoline stocks showed significant builds driven by a drop in the weekly implied demand data during the holiday week.
  • US gasoline crack down -0.5$/bbl at 15.88$/bbl
  • US ULSD crack down -0.3$/bbl at 36.28$/bbl