Oil End of Day Summary: Crude Eases Back

Crude has eased back on the day, although has moderated some of its earlier losses. While the geopolitical risk premium linked to Middle East supply concerns is easing, conflict remains a concern for the market.

• WTI JUN 24 down 0.7% at 81.63$/bbl
• Further sanctions against Irans oil sector were included in the foreign aid bill passed by the US House at the weekend.
• The main buyers of Iranian oil are the Chinese teapot refiners, with neither side using US dollars or the US financial system, making any new sanctions hard to enforce according to Amrita Sen, Director of Research at Energy Aspects.
• The return of oil exports from Kurdistan to Turkey via the ITP pipeline are still undergoing negotiations according to an Iraqi official.
• Venezuela’s PDVSA plans to increase digital currency usage in its crude and fuel exports as the US reimposes oil sanctions, according to Reuters.
• Heavier and more sulfurous crudes are fetching greater spot premiums in the Asian physical market as fuel oil cracks gain and diesel cracks slip.
• Valero Energy Corp. and Chevron Corp. are buying heavy oil for their California refineries shipped through the expanded TMX system in Canada: Bloomberg.
• BNEF estimate a war premium of $25/b already embedded in oil prices even before Iran’s retaliatory strikes.
• UBS is targeting a Brent crude price of $91/bbl by the middle of the year, viewing the current market undersupplied against rising demand it said in a client note.
• Time charter rates for VLCCs are finding a new equilibrium after peaking in mid-Feb, according to Bloomberg Intelligence.