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OIL: Crude Trading at Range Low After Hawkish FOMC Minutes

OIL
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Crude futures are edging lower again today and at the low end of the monthly $3.5/bbl range. The bearish pressure comes on the back of hawkish FOMC minutes with concern that sticky inflation could result in higher for longer US interest rates and limit future oil demand growth.

  • EIA yesterday reported a build in US crude stocks counter to market expectations despite a rise in exports and increase in refinery runs due to the largest adjustment factor since November. US refinery utilisation rose more than expected again to the highest since mid Jan as the ramp up following maintenance continues.
  • Russia has said it will present a plan to deal with its overproduction after exceeding pledged output for April. Earlier this month Iraq and Kazakhstan outlined plans for additional supply cuts to compensate for overproduction in Q1.
    • Brent JUL 24 down 0.3% at 81.63$/bbl
    • WTI JUL 24 down 0.5% at 77.21$/bbl
    • Gasoil JUN 24 down 0.6% at 742$/mt
    • Brent JUL 24-AUG 24 unchanged at 0.26$/bbl
    • Brent DEC 24-DEC 25 down 0.12$/bbl at 3.82$/bbl
  • Brent prompt time spreads recovered slightly yesterday after falling closer towards parity over the last week. The widely held expectation for an extension of OPEC+ production cuts into H2 at the June 1 meeting provided some support.
  • Gasoline cracks are edging higher after the weekly decline amid signs of a recovery in demand ahead of the start of the traditional peak travel season from this weekend. The latest EIA data showed an increase in key fuels demand to counter some of the recent weakness. Implied distillates demand however remains below seasonal levels seen in all recent years except for 2020.
    • US gasoline crack up 0.2$/bbl at 26.2$/bbl
    • US ULSD crack down 0.1$/bbl at 25.18$/bbl
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Crude futures are edging lower again today and at the low end of the monthly $3.5/bbl range. The bearish pressure comes on the back of hawkish FOMC minutes with concern that sticky inflation could result in higher for longer US interest rates and limit future oil demand growth.

  • EIA yesterday reported a build in US crude stocks counter to market expectations despite a rise in exports and increase in refinery runs due to the largest adjustment factor since November. US refinery utilisation rose more than expected again to the highest since mid Jan as the ramp up following maintenance continues.
  • Russia has said it will present a plan to deal with its overproduction after exceeding pledged output for April. Earlier this month Iraq and Kazakhstan outlined plans for additional supply cuts to compensate for overproduction in Q1.
    • Brent JUL 24 down 0.3% at 81.63$/bbl
    • WTI JUL 24 down 0.5% at 77.21$/bbl
    • Gasoil JUN 24 down 0.6% at 742$/mt
    • Brent JUL 24-AUG 24 unchanged at 0.26$/bbl
    • Brent DEC 24-DEC 25 down 0.12$/bbl at 3.82$/bbl
  • Brent prompt time spreads recovered slightly yesterday after falling closer towards parity over the last week. The widely held expectation for an extension of OPEC+ production cuts into H2 at the June 1 meeting provided some support.
  • Gasoline cracks are edging higher after the weekly decline amid signs of a recovery in demand ahead of the start of the traditional peak travel season from this weekend. The latest EIA data showed an increase in key fuels demand to counter some of the recent weakness. Implied distillates demand however remains below seasonal levels seen in all recent years except for 2020.
    • US gasoline crack up 0.2$/bbl at 26.2$/bbl
    • US ULSD crack down 0.1$/bbl at 25.18$/bbl