Free Trial

Mid-Day Oil Summary: Crude Rebounds

OIL

Front moth crude is trading through the top range seen so far this year amid rising political risks with ongoing tensions in the Middle East and the escalation in attacks on Russia’s energy infrastructure by Ukraine. A large US crude stock draw yesterday and additional China stimulus plans add further upside.

    • Brent MAR 24 up 1% at 80.88$/bbl
    • WTI MAR 24 up 1.2% at 75.97$/bbl
  • A total of 730mbbls of open Feb24 Brent options positions are currently due to expire on Friday 26 January. Open interest is 492k calls contracts and 238k for puts.
  • The ECB rate decision is due to be announced at 14:15 CET with no changes in policy rates expected or priced in.
  • The Chinese central bank cut the reserve ratio to help reinforce support for the economy and raise hopes of more stimulus measures and economic recovery.
  • A Rosneft refinery in Tuapse was struck by drones early on Thursday Wednesday causing a fire according to Rosneft related Telegram accounts. Further Reuters reports suggest the attack on an oil refinery in southern Russia early Thursday was from Ukrainian drones after prior circulating Telegram reports of the same nature.
  • The long-delayed Trans Mountain pipeline will begin filling with oil in February.
  • West Canadian Select discounts to WTI narrowed to their lowest since Aug. 2023 as the approaching completion of the TMX pipeline looks set to boost demand, according to Oilprice.
  • Norway’s DNO has not been asked by the KRG to reduce its oil production in order to meet Iraq’s OPEC+ quota, Managing Director Chris Spencer on Thursday, cited by Bloomberg.
  • Brent could rise to $90/bbl if Middle East disruption spreads amid escalating tensions according to a bullish scenario from Citigroup.
  • Chinese seaborne crude imports are slowing this month and may have fallen below 10mbpd, Rohit Rathod, senior oil market analyst at Vortexa said, indicating demand weakness.
  • Indian oil products demand is expected to grow by 3% in the 2024/25 fiscal year starting 1 April, the slowest pace in four years, amid slowing economic activity according to data from the oil ministry’s Petroleum Planning and Analysis Cell.
  • Asian refiners are selling February loading gasoil/jet fuel cargoes at their deepest discounts in at least two months due to surging freight rates driven by Red Sea disruption according to Reuters sources.
    • US gasoline crack down -0.1$/bbl at 18.98$/bbl
    • US ULSD crack up 1.2$/bbl at 37.75$/bbl

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.