Oil End of Day Summary: Crude Continues Trading Lower

WTI has recovered some of its earlier losses, although remains down on the day. Pressure is coming from large US product builds and strong non-OPEC production. This is outweighing support from a larger than expected draw in US crude stocks and continued disruption in the MENA region.

• WTI FEB 24 down -0.8% at 72.14$/bbl
• EIA Weekly US Petroleum Summary - w/w change week ending Dec 29: Crude stocks -5,503 vs Exp -3,406, Crude production -100, SPR stocks +1,055, Cushing stocks +706
• The US-led force in the Red Sea has shot down 19 drones and missiles launched by Iranian-backed Houthis in less than a month, but there is no sign of the attacks abating, according to the commander of the US Navy forces in the Middle East, cited by Bloomberg.
• The long-delayed Trans Mountain Corp pipeline expansion plans to begin line fill in March or May depending on the diameter of pipe it uses and assuming no new problems it said in a filing Wednesday, but it still awaits regulatory approval.
• Oil prices are not reacting much to Red Sea escalations and geopolitical tensions because fundamentals are softer for crude right now according to Energy Aspects Director Amrita Sen.
• The oil market is overly complacent about geopolitical risks while demand has disappointed in China and India according to Rapidan Energy Group via Bloomberg.
• Morgan Stanley has cut the forecast for Brent crude prices in 2024 by nearly 9% to around $77.5/bbl with prices falling to the mid to low $70s during 2025.
• Brent is expected to hold in the $80-$90/bbl range this year with a forecast for the end of March lowered to $84/bbl, and June and September to $86/bbl, from the previous estimate of $95/bbl according to UBS.