Mid-Day Oil Summary: Crude Trades Lower

Front month crude has fallen through Friday’s low today driven by demand uncertainty and a stronger US dollar, offsetting upside risks from Middle East tensions and Ukraine’s attacks on Russian energy infrastructure.

• Brent APR 24 down -0.6% at 76.84$/bbl
• WTI MAR 24 down -0.8% at 71.68$/bbl
• The US intends to undertake further strikes in retaliation for the US personal killed by an Iranian backed militia the weekend before last according to White House National Security Adviser Jake Sullivan.
• Recent crude oil buying patterns have changed and looked increasingly more local as Houthi rebel attacks in the Red Sea and surging freight rates make more local supplies more attractive, sources told Bloomberg.
• Venezuela’s Foreign Minister Yvan Gil says he has discussed with Iranian Oil Minister Javad Owji ways to bolster the “energy alliance” between the two countries after their meet on Friday.
• The amount of crude oil held on tankers that have been stationary for at least seven days rose by 8.3% on the week to 73.09m bbl as of 2 February, Vortexa data show.
• The number of vessels that were switched to Gabon’s flag surged fivefold in January compared with the monthly average in 2023, Windward data showed, suggesting several Russian dark fleet tankers changed flag.
• Greek shipowners are moving away from Russian crude movements according to Bloomberg vessel tracking.
• Feedstock imports for crude, bitumen mix and fuel oil to China’s independent refineries in Jan fell to the lowest since June 2022 according to tanker-tracking data by OilChem.
• Kuwait’s 615,000 bpd Al-Zour refinery reached full production capacity for the first time on February 4 KIPIC announced via X.
• Diesel markets are supported after the Lukoil refining facility in Volgograd closed after a fire. Diesel markets were previously under downside pressure last week along with crude amid global demand concerns after US payrolls data prompted Fed repricing suggesting lower rates cuts this year.
• ExxonMobil has halted several units on Monday as part of a scheduled maintenance at the 131kbpd Fos-sur-Mer oil refinery in France according to a community alert.
• The fire at a pipeline of Lukoil’s Volgograd oil refinery has been extinguished following a drone attack, and the facility is operating normally, BP’s spokesperson said, cited by Tass.
• Russian gasoline production dropped 2% in January y/y to 3.49mn metric tons according to Kommersant citing refinery outages as the driver.
  • US gasoline crack up 0.8$/bbl at 18.49$/bbl
  • US ULSD crack up 0.3$/bbl at 40.16$/bbl