Mid-Day Oil Summary: Crude Ticks Higher

Crude markets are ticking higher on Thursday supported by US Fed rate cut signals and more stimulus measures for the Chinese property sector. Ongoing Houthi rebel attacks in the Red Sea are adding further upside.

• Brent APR 24 up 0.8% at 81.17$/bbl
• WTI MAR 24 up 0.8% at 76.44$/bbl
• UKMTO received report of an incident 57nm west of Al Hudaydah, Yemen. The attack took place at around 10:00 UTC.
• The US struck further Houthi targets Wednesday while the US response towards Iran after the strike in Jordan at the weekend remains unclear – leaving oil markets tense.
• OPEC+ has not made any recommendations to change the group’s output policy in the today’s JMMC meeting but noted high conformity with production quotas, the group said in a release.
• Iranian Oil Minister Javad Oji left Tehran for Caracas on Wednesday for talks with his Venezuelan counterpart Pedro Rafael Tellechea according to IRNA reports.
• Oil flows via the Suez Canal are down about 15% with safety concerns impacting the shipping route according to Morgan Stanley on Jan 31.
• The Canada Energy Regulator said on Wednesday it has no environmental or safety concerns with the latest construction issues that are delaying the Trans Mountain Pipeline completion.
• Russian oil tankers sailing through the Red Sea have only fallen slightly amid ongoing Houthi rebel attacks, while traffic last week was still around 20% higher than the 2023 average, Vortexa data showed.
• India’s crude oil imports from Russia fell for the second consecutive month in January to 1.289mbpd, a one-year low, as tighter Western sanctions hit supply of light sweet Sokol grade, LSEG data showed.
• January oil demand is likely to end 400kb/d below expectations due to lower heating oil use from an unseasonably warm month according to a note from JPMorgan on Jan 31.
• China’s crude refining capacity may increase 2.7% y/y in 2024 according to GL Consulting, a division of OilChem.
• Russian oil product exports from the Black Sea port of Tuapse are set to fall by 59.1% month on month in February to 0.416mn tons, traders told Reuters.
• US crude production reached a record high of 13.308mbpd in November according to the updated EIA monthly production data to surpass the previous record seen in September.
• Diesel sales by India’s state-run refiners fell by 2.6% on the month to 6.568m tons in January according to company data via Bloomberg.
• Diesel cracks are finding some support this week amid tighter supply concern due to shipping delays from Red Sea tanker diversions. European imports of diesel are expected to decline well below 2023 levels in the first half of February with supply from India the lowest in two years.
• Phillips 66 plans to stop processing crude in February at its Rodeo, California refinery as it moves to renewable fuels.
  • US gasoline crack up 0.1$/bbl at 17.85$/bbl
  • US ULSD crack down 0$/bbl at 41.45$/bbl