Oil Markets Holding onto Midweek Gains

Oil holds onto its midweek gains Friday that were spurred by the US Federal Reserve signalling US rate cuts next year, dollar weakness, persistent Red Sea shipping threats and larger than expected US oil stockpile draws.

• Brent FEB 24 up 0.4% at 76.91$/bbl
• WTI JAN 24 up 0.4% at 71.85$/bbl
• Gasoil JAN 24 up 0.7% at 757.5$/mt
• WTI-Brent down -0.06$/bbl at -4.74$/bbl
• Brent and WTI are on track for a minor weekly gain – the first in two months.
• The US dollar fell to a four-month low on Thursday after the US Fed indicated interest rate hikes have likely ended and lower borrowing costs are in sight, supporting dollar denominated trade such as oil.
• Timespreads still flash signs of weakness, with Brent and WTI both in bearish contango until the middle of next year.
• Brent’s six-month spread was last 38 cents/bbl in contango, compared with $1.67/bbl in bullish backwardated structure a month ago.
• Brent FEB 24-MAR 24 up 0.03$/bbl at -0.21$/bbl
• Guyana and Venezuela on Thursday agreed to avoid any use of force and to not escalate tensions in their long-running dispute over the oil-rich Esequibo.
• Further weak China data adds downside as its market remains sluggish until new quotas are issued. Official statistics show refinery runs in November dropped to their lowest level since the start of 2023.
• One of the largest tanker companies, Maersk Tankers, has told its fuel carrier crews they can bypass the Red Sea after a series of missile and drone attacks on vessels in the area from the Yemeni coast this week.
• World oil consumption will rise by 1.1 mn bpd in 2024, the IEA said in its latest monthly report, up 130,000 bpd from its previous forecast, citing an improvement in the outlook for the US and lower oil prices.
• US gasoline pump prices are seeing their lowest prices since mid-2021 according to OPIS who added that RBOB is riding a crest of enthusiasm thanks to disinflation. The US national average gasoline price has dropped for 12 straight weeks according to GasBuddy.
• US gasoline crack down -0.2$/bbl at 17.31$/bbl
• US ULSD crack up 0.6$/bbl at 37.7$/bbl