Mid-Day Oil Summary: Crude Pulls Back

Crude markets are pulling back but recovered some of the earlier losses. Market volatility remains subdued with geopolitical risks, potential Fed easing this year and expectation of a market deficit in Q2 due to tighter supply weighed against demand uncertainty in China and non-compliance with OPEC+ quotas.

• Brent MAY 24 down 0.5% at 85.84$/bbl
• WTI MAY 24 down 0.4% at 81.33$/bbl
• API weekly oil stock data: Crude +9.3mbbl, Cushing +2.4mbbl, Gasoline -4.4mbbl, Distillate +0.5mbbl
• The EIA weekly petroleum inventory data for the week ending Mar. 22 is due for release this afternoon at 10:30ET (14:30GMT).
• Crude inventories in the ARA region rebounded with an increase of 2.535mbbl to 51.62mbbl in the week to March 22 according to the latest Genscape data.
• JPMorgan maintains a baseline view for Brent prices to reach $90/bbl by May, and $85/bbl in H2 2024 but has the potential to rally to $100/bbl this year.
• Russian oil firms face delays of up to several months to be paid for crude and fuel as banks in China, Turkey and the UAE boost compliance requirements, eight sources told Reuters.
• The US Department of Treasury issued a sixth round of sanctions targeting additional actors and tankers linked to shipping Iranian commodities and fund the activities of related groups in the region, specifically the Houthis, on 26 March.
• North Sea Johan Sverdrup crude loadings are scheduled to decline from a record of 793kb/d in April to 742kb/d in May, based on a loading programme seen by Bloomberg.
• Oil product stockpiles at the Port of Fujairah declined by 1.3% last week to 19.785mn barrels as of 25 March, driven by declines in heavy distillates stocks, according to the Fujairah Oil Industry Zone data.
• Russian diesel exports are slipping and will inevitably fall further over the coming months according to Vortexa due to Russian refinery drone strikes.
• China's refined oil exports are forecast to fall by 22.04% m/m to 3.29m tonnes in April according to OilChem. The planned exports are however up 44.17% year on year.
• Diesel and gasoline cracks have steadied after a drop yesterday amid a recovery in US refining and weak seasonal demand. The US diesel crack spread is the lowest since June 2023, but gasoline cracks are seeing more support with demand increasing ahead of the summer driving season.
  • US gasoline crack up 0.1$/bbl at 31.35$/bbl
  • US ULSD crack down 0$/bbl at 28.06$/bbl