Mid-Day Oil Summary: Crude Trades Rangebound

Crude prices are holding onto some of yesterday’s gains driven by shipping disruptions in the Red Sea with a growing numbers of tanker companies to pause the Red Sea route to instead chose the longer voyage via the Cape of Good Hope. Front month Brent spiked to $79.51/bbl on Monday, the highest level since 4 December.

• Brent FEB 24 down -0.1% at 77.89$/bbl
• WTI JAN 24 down -0.1% at 72.4$/bbl
• The API oil inventory data is due for release today at 16:30 ET.
• Several companies shipping energy products have announced to pause shipments via the Red Sea, including Equinor and BP, sparking fears for supply passing through the Suez Canal.
• The US has put together a new naval task force to patrol the troubled area and protect commercial vessels.
• Disruption to energy flows through the Bab-El-Mandeb strait is unlikely to have a large impact on crude oil and LNG prices according to Goldman Sachs. Production should not be directly affected due to vessel redirection opportunities.
• Oil output in the major US shale oil basins is forecast to fall by 1kbpd to 9.692mbpd in January according to the EIA drilling productivity report released yesterday.
• China's Sinochem Corp has agreed to buy a million barrels of heavy Venezuelan Merey crude at a discount of 11$/bbl to dated Brent crude on a DES basis for arrival in December according to Reuters sources.
• DNO announced that its gross production from the Tawke field in the Kurdistan region is increasing to around 90kbpd in December, up from an average production of 26kbpd in the third quarter.
• China’s refined oil exports were 3.64m mt, up 6.7% on the month but down 24.8% on the year, according to GACC data, cited by OilChem.
• Diesel and gasoline crack spreads have eased back after yesterday’s increase following the rally in wider oil markets.
  • US gasoline crack down -0.6$/bbl at 18.01$/bbl
  • US ULSD crack down -0.9$/bbl at 39.23$/bbl