Mid-Day Oil Summary: Crude Trades Higher

Crude futures are ticking above the highs from yesterday but below the peak from last week of $80.75/bbl and despite the US dollar strength today. The market continues to weigh supply concerns due to Middle East tensions against soft demand growth and amid ongoing uncertainty over the market impact of OPEC+ cuts during Q1.

• Brent MAR 24 up 0.5% at 78.55$/bbl
• WTI FEB 24 up 0.1% at 72.76$/bbl
• Crude near term options volatilities are showing the smallest downside put skew since early November amid Middle East escalation risks and Red Sea shipping disruption.
• Large numbers of merchant ships continue to transit the Bab el-Mandeb strait despite the potential threat of Houthi attacks and warnings to avoid the area.
• The price cap on Russian oil have led to crude delivery issues at Indian ports according to its Oil Minister Hardeep Singh Puri at Davos Tuesday.
• The latest EIA US drilling productivity report is due for release today at 14:00ET.
• Venezuelan President again claimed his country’s right to the disputed Essequibo region of Guyana in his annual address to the National Assembly on Monday.
• Indian state-owned refiners have started negotiations to purchase Venezuelan crude, after Venezuelan authorities agreed to give crude oil to a ONGC subsidiary against its accrued dividend, an oil minister said.
• Angola plans to export 1.05m b/d of crude in March, according to a preliminary loading schedule.
• SK Innovation Co., owner of South Korea's top refiner SK Energy, said there are no changes to crude purchasing despite the increased pressure from the current Middle East tensions according to Bloomberg.
• Chinese refiners are actively looking for crude cargoes for March-April delivery to replenish stocks while prices are relatively low and demand is muted, according to Reuters.
• Diesel sales by India’s state-run refiners fell by 3.2% on the month to 3.07m tons in the first 15 days of January according to company data via Bloomberg.
• Normal operations at the Parkland Burnaby refinery in Canada at are expected to resume this week, with preparations to restart units as warm weather returns.
• US gasoline and diesel crack spreads resumed the recent trend higher after a slight correction lower on Friday driven by US refinery outages, higher gasoline demand, and severe cold weather in the US this week.
  • US gasoline crack up 1.4$/bbl at 18.03$/bbl
  • US ULSD crack up 1.2$/bbl at 40.72$/bbl