Mid-Day Oil Summary: Crude Retreats

Front month crude is easing back over uncertainty of Red Sea shipping and potential disruptions to crude supplies, while some shipping firms resumed traffic in the region. Crude markets spiked yesterday after Houthi rebels attacked another container ship.

• Brent FEB 24 down -0.6% at 80.57$/bbl
• WTI FEB 24 down -0.7% at 75.03$/bbl
• The API oil inventory data is due for release today at 16:30 ET ahead of the EIA Weekly Petroleum Status Report tomorrow due to changed schedule because of the Christmas holidays.
• Concerns over shipping in the Red Sea continue to support crude markets. On Tuesday Houthi revels attacked the MSC United VIII container ship that was headed for Pakistan. Despite that, major shipping firms such as Maersk and CMA CGM were resuming passage through the Red Sea. Hapag-Lloyd will decide today whether to resume Red Sea shipping.
• Kazakhstan’s daily crude output fell by 3.6% to 254k tons as the CPC oil terminal at Russia’s Black Sea halted loading due to weather conditions. Daily output at Tengiz fell by 5.4% to 78.6k tons according to Interfax.
• The Department of Energy awarded a tender to buy US crude oil for its SPR to three companies for 1-31 March delivery.
• Russia has shipped 50% of its oil and petroleum exports to China, while shipments to India have risen to a share of 40% this year, Russian Deputy PM Alexander Novak said, cited by Bloomberg.
• China has released the first batch of 2024 crude oil import quotas to 11 non state-owned refineries in mid-December with a total volume of 3.68mn tons according to OilChem.
• China has raised its 2024 fuel oil import quota to 20mn tons for non-state refiners, up from 19.2mn tons for 2023 according to the Ministry of Commerce.
• Exports of gasoline, gasoil, and kerosene from China in November rose by 7% on the month to 3.64m mt, according to OilChem, citing GACC data.
• US gasoline and diesel cracks edging higher on the day with diesel cracks still at a multi-month low. Weekly (Sun-Sat) US gasoline demand fell 0.2% but was 1.1% above the average of the last four weeks at 8.518mbpd according to GasBuddy.
  • US gasoline crack up 0.3$/bbl at 16.04$/bbl
  • US ULSD crack up 0.4$/bbl at 35.92$/bbl