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Mid-Day Oil Summary: Crude Rebounds on Shipping Risks

OIL

Front month crude has rebounded from earlier losses to trade higher on the day supported by Red Sea shipping disruptions with BP as the latest company to pause all of its tanker traffic through the Red Sea an increase in Houthi attacks on vessels in recent days.

    • Brent FEB 24 up 1% at 77.32$/bbl
    • WTI JAN 24 up 0.9% at 72.09$/bbl
  • Vessel attacks in the Red Sea are increasing. On Monday, the UK’s Maritime Trade Organization said it had received a report of a possible explosion close to Yemen’s port of Mokha as well as reports on two other incidents near the Bab al Mandab strait according to Reuters.
  • BP is the latest firm to pause all of its tanker traffic through the Red Sea following an increase in Houthi attacks on vessels in recent days, the firm said, cited by Bloomberg.
  • Goldman Sachs has cut the Brent forecasts for 2024 by 10$/bbl to an average of 81$/bbl with only a “modest deficit”. The forecast suggests Brent at 80$/bbl in 2025 and the 36-month Brent forecast reduced to 72$/bbl.
  • Russia announced it will extend its existing exports cuts by potentially 50kbpd or more in December, deepening its cuts beyond the 300kbpd previously agreed for this month, Russian Deputy PM Alexander Novak said.
  • Oil exports out of Texas are surging in the final weeks of 2023, according to Reuters, driven by record production levels and the need to avoid high year-end taxes on inventories.
  • The amount of crude oil held around the world on tankers that have been stationary for at least seven days fell by 13% on the week 73.32m bbl as of Dec. 15, Vortexa data show.
  • Crude imports into Shandong’s independent refineries in the week to Dec. 17 rose to 1.9m mt, according to OilChem.
  • Chinese diesel exports last month fell by 44.9% on the year to 1.16mn tons, but up from 1.11mn tons in October, data from the General Administration of Customs showed, cited by Reuters.
  • Gasolione cracks are holding most of their gains from last week although have softened from their highs on Friday while diesel cracks have also found some support after drifting slightly lower in early December.
  • The 40kbpd ACU-2 CDU at TotalEnergies’ 238kbpd Port Arthur refinery remains shut three weeks after the end of the planned maintenance at the refinery, people familiar with the operations told Reuters.
    • US gasoline crack up 0.1$/bbl at 17.97$/bbl
    • US ULSD crack up 0.9$/bbl at 39.49$/bbl
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Front month crude has rebounded from earlier losses to trade higher on the day supported by Red Sea shipping disruptions with BP as the latest company to pause all of its tanker traffic through the Red Sea an increase in Houthi attacks on vessels in recent days.

    • Brent FEB 24 up 1% at 77.32$/bbl
    • WTI JAN 24 up 0.9% at 72.09$/bbl
  • Vessel attacks in the Red Sea are increasing. On Monday, the UK’s Maritime Trade Organization said it had received a report of a possible explosion close to Yemen’s port of Mokha as well as reports on two other incidents near the Bab al Mandab strait according to Reuters.
  • BP is the latest firm to pause all of its tanker traffic through the Red Sea following an increase in Houthi attacks on vessels in recent days, the firm said, cited by Bloomberg.
  • Goldman Sachs has cut the Brent forecasts for 2024 by 10$/bbl to an average of 81$/bbl with only a “modest deficit”. The forecast suggests Brent at 80$/bbl in 2025 and the 36-month Brent forecast reduced to 72$/bbl.
  • Russia announced it will extend its existing exports cuts by potentially 50kbpd or more in December, deepening its cuts beyond the 300kbpd previously agreed for this month, Russian Deputy PM Alexander Novak said.
  • Oil exports out of Texas are surging in the final weeks of 2023, according to Reuters, driven by record production levels and the need to avoid high year-end taxes on inventories.
  • The amount of crude oil held around the world on tankers that have been stationary for at least seven days fell by 13% on the week 73.32m bbl as of Dec. 15, Vortexa data show.
  • Crude imports into Shandong’s independent refineries in the week to Dec. 17 rose to 1.9m mt, according to OilChem.
  • Chinese diesel exports last month fell by 44.9% on the year to 1.16mn tons, but up from 1.11mn tons in October, data from the General Administration of Customs showed, cited by Reuters.
  • Gasolione cracks are holding most of their gains from last week although have softened from their highs on Friday while diesel cracks have also found some support after drifting slightly lower in early December.
  • The 40kbpd ACU-2 CDU at TotalEnergies’ 238kbpd Port Arthur refinery remains shut three weeks after the end of the planned maintenance at the refinery, people familiar with the operations told Reuters.
    • US gasoline crack up 0.1$/bbl at 17.97$/bbl
    • US ULSD crack up 0.9$/bbl at 39.49$/bbl