Mid-Day Oil Summary: Crude Rises on Middle East Tensions

Crude is gaining ground to reverse some of the decline seen late last week with rising tensions in the Middle East. Iran have sent a warship to the Red Sea after three Houthi boats sunk as the US responded to further vessel attacks over the weekend, while some shipping companies have again suspended traffic in the region.

• Brent MAR 24 up 2.1% at 78.66$/bbl
• WTI FEB 24 up 2.1% at 73.15$/bbl
• Maersk has again suspended all Red Sea transit with ships diverted around southern Africa in response to the latest Houthi attack. The firm will decide on Tuesday when to resume traffic in the region.
• Chinese oil import quotas have been released at 179.01mn metric tons for 2024 according to consultancies including JLC and Longzhong – 60% higher y/y. China has issued the first batch of 2024 oil product export quotas at 19mn metric tons – flat y/y and in line with market expectations according to JLC.
• India’s crude oil imports from Russia plunged to 1.48mbpd in December, the lowest level since January 2023 and down from a record of 2.15mbpd in May, as six tankers carrying Sokol grade oil could not deliver due to payment issues amid tightening sanctions according to Kpler.
• Nigeria’s Dangote refinery received a fourth shipment of 1mn bbls of crude from NNPC with a fifth expected soon it said in a statement Sunday.
• Kazakhstan’s crude and condensate production recovered in December at around 1.84mn bpd in December, up from 1.78mn bpd in November according to Bloomberg.
• Global crude floating storage on tankers for at least seven days fell 16% from the week prior to 77.39mbbls as of December 29 according to Vortexa data.
• Russian average daily refinery runs stood at 5.543mbpd during 1-27 December, a person with knowledge of the matter said, little changed from a similar period in November as Black Sea storms hindered refineries to raise crude processing rates as planned.
• Diesel and gasoline cracks are edging higher with gasoline supported by a recent recovery in US demand and diesel finding some support with inventories still below normal and after the trend lower during Nov and Dec amid concern for soft demand.
  • US gasoline crack up 0.5$/bbl at 17.27$/bbl
  • US ULSD crack up 0.4$/bbl at 34.99$/bbl