Oil Makes Slight Recovery from Bearish Wednesday

Oil prices show a slight recovery Thursday from the latest sell off as bearish sentiment takes hold post OPEC+ meet. Despite last week’s OPEC+ voluntary cut commitments, oil slumped to near a five-month low on oversupply concerns.

• Brent FEB 24 up 0.6% at 74.73$/bbl
• WTI JAN 24 up 0.5% at 69.74$/bbl
• Gasoil DEC 23 up 0.3% at 770.75$/mt
• WTI-Brent down -0.04$/bbl at -4.76$/bbl
• The main concerns focus on extra supply coming from outside the group, such as continued strength out of places like the US, Brazil and Guyana as well as nations in the group not bound by quotas likes Libya, Venezuela and Iran. There are also concerns about the extra OPEC+ voluntary cuts actually being complied with.
• Russian President Vladamir Putin went on a rare dual Middle East day trip Wednesday to see the leaders of the UAE and Saudi Arabia, in a move that may help to show the market that key OPEC+ figures remain motivated to co-operate with the latest cuts.
• Oil prices have fallen by about 10% since OPEC+ announced a combined 2.2 mn bpd voluntary output cuts, though 1mn bpd of that remains the existing voluntary Saudi cuts.
• Brent FEB 24-MAR 24 up 0.02$/bbl at -0.13$/bbl
• Brent MAR 24-APR 24 unchanged at -0.04$/bbl
• Russia will offer more data to the markets about how much fuel it is refining as well as exporting after OPEC+ asked Moscow for more transparency according to Reuters reports.
• For the first time in a year, the market structure for Brent contracts switched to trade in contango, with contracts for near-term delivery cheaper than six months later. WTI contracts have also switched to trade in contango over six months out.
• Bearishness came for US oil products in the form of higher inventories in the latest EIA report. Gasoline stocks rose by 5.4 mn bbls in the week to 223.6 mn bbls, far exceeding expectations for a 1 mn bbl build.
• GasBuddy and OPIS place US gasoline demand at seasonally weak levels of 8-8.5mn bpd with cheaper pump prices doing little to spur buying activity.
• US gasoline crack down -0.2$/bbl at 15.95$/bbl
• US ULSD crack down -0.1$/bbl at 38.88$/bbl