Mid-Day Oil Summary: Crude Retreats

Crude futures are extending yesterday’s losses after a larger than expected stock draw. Market focus has switched to upside risks with a possible OPEC+ cut extension widely expected in early March and with ongoing Red Sea shipping disruption.

• Brent MAY 24 down -0.6% at 81.65$/bbl
• WTI APR 24 down -0.5% at 78.17$/bbl
• Saudi Aramco could maintain the Arab Light official selling price to Asia unchanged in April according to the median estimate of a Bloomberg survey of four refiners and traders.
• Russia's oil output in 2024 is expected to reach 520-530 mln tons compared to over 530 mln tons last year according to Deputy PM Alexander Novak Tuesday.
• Shipping data shows six tankers carrying Russian oil in ships sanctioned by the US were sailing to Chinese ports this week according to Reuters. It is however unclear if they would be allowed to discharge the cargoes.
• The US DOE purchased 3.2mn barrels of crude oil for the SPR for July delivery, it said in a statement.
• Russia and Iran continue discussions to negotiate a swap of oil and gas supplies, Russian Deputy Prime Minister Alexander Novak said.
• Russia is planning to lift the ban on winter-grade diesel exports from 22 March due to seasonally lower demand according to a document seen by Bloomberg.
• Singapore low sulphur fuel oil arrivals from the West are expected to drop for a second straight month in March according to Platts with arbitrage economics mostly unviable due to the Red Sea situation.
• Naftna Industrija Srbije has starting planned maintenance at the 96kbpd Pancevo oil refinery in Serbia until 17 April, the firm told Bloomberg.
• China’s refining capacity is expected to rise by 2.7% y/y in 2024 to 961mn mt/year or 19.3mn bpd according to CNPC's Economics & Technology Research Institute (ETRI).
• Gasoline and distillate cracks weakened taking US distillate cracks to the lowest levels since July. The latest weekly EIA oil data showed an increase in US gasoline implied demand but a drop in distillates implied demand on the week but both in line with seasonal trends.
  • US gasoline crack up 0.3$/bbl at 28.65$/bbl
  • US ULSD crack up 0.1$/bbl at 31.82$/bbl