Mid-Day Oil Summary: Crude Starts Week Lower

Crude prices have fallen during European morning trading, maintaining the previous week’s trend. Pressure comes from an unwinding in crude’s geopolitical risk premium as Middle East confrontations have so far failed to disrupt physical supplies.

• Brent JUN 24 down 0.6% at 86.78$/bbl
• WTI MAY 24 up 0% at 83.15$/bbl
• Further sanctions against Irans oil sector were included in the foreign aid bill passed by the US House at the weekend.
• Global crude in floating storage held on tankers for at least 7 days fell to 75.45mn bbls as of April 19, down by 18% from 92.10mn bbls the week prior according to Vortexa.
• Chinese crude oil imports from Russia surged to a near record high in March amid an increase in deliveries of Sokol crude previously stranded on water due to tightened US sanctions.
• The main buyers of Iranian oil are the Chinese teapot refiners, with neither side using US dollars or the US financial system, making any new sanctions hard to enforce according to Amrita Sen, Director of Research at Energy Aspects.
• Heavier and more sulfurous crudes are fetching greater spot premiums in the Asian physical market as fuel oil cracks gain and diesel cracks slip.
• Valero Energy Corp. and Chevron Corp. are buying heavy oil for their California refineries shipped through the expanded Trans Mountain Pipeline system in Canada, according to Bloomberg sources.
• UBS is targeting a Brent crude price of $91/bbl by the middle of the year, viewing the current market undersupplied against rising demand it said in a client note.