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OIL: Crude Extends Recovery with Focus on Demand, OPEC and Geopolitical Risks

OIL
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Front month Brent crude has rebounded from a low of $81.71/bbl and currently showing a net gain on the week with focus still on the geopolitical risks and the Middle East, OPEC+ output policy and global demand.

  • Broader macro trends around a softer dollar and jobs data supportive of US Fed rate cuts this year have helped support crude markets.
    • Brent JUL 24 up 0.7% at 84.49$/bbl
    • WTI JUN 24 up 0.8% at 79.93$/bbl
    • Gasoil JUN 24 up 0.7% at 768.75$/mt
    • WTI-Brent up 0.03$/bbl at -5.06$/bbl
  • Weaker China oil import data yesterday is set against improved broader macro trends from China, while housing equity indices are rising on easier restrictions in a number of cities.
  • Israel has launched attacks into Rafah, with cease-fire talks not producing a positive result at this stage.
  • A Russia oil refinery in Kaluga region caught fire after a strike by several drones according to RIA but has since been put out.
    • Brent JUL 24-AUG 24 up 0.02$/bbl at 0.56$/bbl
    • Brent DEC 24-DEC 25 up 0.15$/bbl at 4.85$/bbl
  • Growing expectation of an OPEC+ output cut extension into Q3 is also supportive with time spreads regaining some ground in recent days. Brent Dec24-Dec25 has recovered from a low of $4.23/bbl on May 8 but is still well below a high of $6.92/bbl from early April.
  • Gasoline crack spreads are heading for another net decline on the week as low demand levels continue to weigh on prices although spreads have found some support since May 8. US diesel spreads eased back yesterday but are holding just above the lows of around $23.3/bbl from the start of May.
    • US gasoline crack up 0.2$/bbl at 27.62$/bbl
    • US ULSD crack up 0.3$/bbl at 24.99$/bbl
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Front month Brent crude has rebounded from a low of $81.71/bbl and currently showing a net gain on the week with focus still on the geopolitical risks and the Middle East, OPEC+ output policy and global demand.

  • Broader macro trends around a softer dollar and jobs data supportive of US Fed rate cuts this year have helped support crude markets.
    • Brent JUL 24 up 0.7% at 84.49$/bbl
    • WTI JUN 24 up 0.8% at 79.93$/bbl
    • Gasoil JUN 24 up 0.7% at 768.75$/mt
    • WTI-Brent up 0.03$/bbl at -5.06$/bbl
  • Weaker China oil import data yesterday is set against improved broader macro trends from China, while housing equity indices are rising on easier restrictions in a number of cities.
  • Israel has launched attacks into Rafah, with cease-fire talks not producing a positive result at this stage.
  • A Russia oil refinery in Kaluga region caught fire after a strike by several drones according to RIA but has since been put out.
    • Brent JUL 24-AUG 24 up 0.02$/bbl at 0.56$/bbl
    • Brent DEC 24-DEC 25 up 0.15$/bbl at 4.85$/bbl
  • Growing expectation of an OPEC+ output cut extension into Q3 is also supportive with time spreads regaining some ground in recent days. Brent Dec24-Dec25 has recovered from a low of $4.23/bbl on May 8 but is still well below a high of $6.92/bbl from early April.
  • Gasoline crack spreads are heading for another net decline on the week as low demand levels continue to weigh on prices although spreads have found some support since May 8. US diesel spreads eased back yesterday but are holding just above the lows of around $23.3/bbl from the start of May.
    • US gasoline crack up 0.2$/bbl at 27.62$/bbl
    • US ULSD crack up 0.3$/bbl at 24.99$/bbl