Oil Steady Ahead of EIA Data After Drop Since OPEC Meeting

Amid volatile trading front month Brent has seen a net decline of around 7$/bbl since reaching a peak ahead of the OPEC+ meeting last week. Bearish market sentiment reflects the market uncertainty over future compliance with voluntary OPEC+ and with building spare capacity and strong non-OPEC supplies especially from the US.

• Brent FEB 24 up 0.2% at 77.38$/bbl
• WTI JAN 24 up 0.1% at 72.37$/bbl
• Gasoil DEC 23 down -0.3% at 789.75$/mt
• WTI-Brent down -0.03$/bbl at -4.77$/bbl
• Saudi Arabia yesterday cut all official selling prices for Jan including the Arab Light OSP to Asia but by less than expected with a cut of 0.50$/bbl. January OSPs for all grades to the US were lowered by 0.30$/bbl and to NW Europe and the Mediterranean were cut by 2$/bbl.
• OPEC+ members are trying to convince the market that they will adhere to pledged production cuts in Q1. Russia is to start tightening restrictions on oil and fuel supplies as early as December and intends to fulfil its obligations as early as January said Deputy PM Novak.
• OPEC+ cuts could be extended beyond Q1 2024 and the supply reductions will only be withdrawn after consideration of market conditions and using a “phased-in approach according to Saudi Energy Minister.
  • Brent FEB 24-MAR 24 down -0.02$/bbl at 0.01$/bbl
  • Brent JUN 24-DEC 24 up 0.06$/bbl at 1.3$/bbl
• The prompt Brent time spread has edged back up into narrow backwardation but the WTI spread remains in contango. The Jun24-Dec24 spreads are following the front month down to the lowest since June.
• Diesel cracks are holding steady and gasoline drifting back down from earlier gains ahead of the updated weekly EIA oil inventory data. API data last night showed distillates and gasoline builds along with a small crude build.
  • US gasoline crack down -0.3$/bbl at 16.27$/bbl
  • US ULSD crack up 0.4$/bbl at 38.83$/bbl