Oil Summary at European Close: Crude Eases

Crude has eased back further during the European afternoon and is on track for its lowest close since March 27. The market continues to jettison some of its geopolitical risk premium, while a likely delay in Fed rate cuts is capping demand outlooks.

• Brent JUN 24 down 0.9% at 86.5$/bbl
• WTI MAY 24 down 0.6% at 82.63$/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.
• Global crude in floating storage held on tankers for at least 7 days fell to 75.45mn bbls as of April 19, down by 18% from 92.10mn bbls the week prior according to Vortexa.
• The return of oil exports from Kurdistan to Turkey via the ITP pipeline are still undergoing negotiations according to an Iraqi official.
• 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.