Mid-Day Oil Summary: Crude Stabilises

Crude markets pulled back from an initial surge higher to stabilise on the day as the market assesses the risks amid escalation in the Middle Eastern conflict in recent days and increasing attacks on Russian energy infrastructure.

• Brent MAR 24 up 0.1% at 83.65$/bbl
• WTI MAR 24 up 0.1% at 78.11$/bbl
• Crude managed money net long positions increased last week to the highest since the end of October despite a drop in Brent positions from a high the previous week. The combined net long positions for Brent and WTI rose by +39k to 336k according to the Commitments of Traders data released on Friday.
• Yemen’s Houthi rebels launched a missile attack on Friday that sparked a fire on a fuel tanker operated by Trafigura, carrying Russian naphtha, raising concerns that attacks on Red Sea shipping are expanding and not just confined to US, UK or Israeli linked ships.
• There are currently no vessels on behalf of Trafigura transiting the Gulf of Aden, following the Houthi rebel attack on Friday, as the company is assessing the risks involved in transiting the region, the firm said in a statement.
• A drone attacked the Slavneft-YANOS refinery in Yaroslavl, Russia, the government of the region, Mikhail Yevrayev said via Telegram, cited by Bloomberg.
• Venezuelan President Nicolas Maduro has not held up on his promise of free and fair election by disqualifying the leading opposition candidate Maria Corina Machado from running for the presidential election this year, putting his six-month sanctions waiver programme at risk.
• The KRG and the federal Iraqi authorities are discussing a deal to reimburse the KRG with a fixed amount selling price for the region’s oil production of around $20.60/bbl, a source told S&P Commodity Insights.
• The amount of crude oil held around the world on tankers that have been stationary for at least seven days fell by 18% to 63.97m bbl as of 26 January, the lowest since March 2020, Vortexa data showed, cited by Bloomberg.
• Repair works at Lukoil’s Norsi refinery are expected to last at least one month but the assessment is ongoing, Russian Deputy Prime Minister Alexander Novak said, cited by Bloomberg.
• Nigeria’s 650kbpd Dangote refinery has started production, Argus reported in mid-January, while gasoline production is expected to start end-March, Dangote Chief Executive, Aliko Dangote said, cited by the Guardian.
• Chinese oil product exports from state-owned refiners are set to fall 13.7% from last month to 3.48m tons in February according to OilChem sources.
• US oil refiners are looking to maximize diesel production at the expense of gasoline according to Bloomberg amid a demand boost for diesel over the winter.
• Oil product tanker utilisation rates could approach 100% should all vessels avoid the Red Sea and divert via the Cape of Good Hope, according to Clarksons, cited by Bloomberg.
  • US gasoline crack down -0.4$/bbl at 19.23$/bbl
  • US ULSD crack down -0.8$/bbl at 39.95$/bbl