Oil Summary at European Close: Crude Falls

Crude is falling following a larger than expected draw in US crude inventories and large gasoline and distillates stocks builds. The market is weighing supply risks from the Middle East and Libya against strong non-OPEC supply and forecasts of slowing global demand growth in 2024.

• Brent MAR 24 down -1.3% at 77.26$/bbl
• WTI FEB 24 down -1.2% at 71.81$/bbl
• EIA Weekly US Petroleum Summary - w/w change week ending Dec 29: Crude stocks -5,503 vs Exp -3,406, Crude production -100, SPR stocks +1,055, Cushing stocks +706
• The US and its allies have warned the Houthis that there will be consequences if they don’t stop attacking ships in the Red Sea. There have been 25 attacks against merchant vessels so far.
• Oil prices are not reacting much to Red Sea escalations and geopolitical tensions because fundamentals are softer for crude right now according to Energy Aspects Director Amrita Sen.
• The oil market is overly complacent about geopolitical risks while demand has disappointed in China and India according to Rapidan Energy Group via Bloomberg.
• The long-delayed Trans Mountain Corp pipeline expansion plans to begin line fill in March or May depending on the diameter of pipe it uses and assuming no new problems it said in a filing Wednesday, but it still awaits regulatory approval.
• Morgan Stanley has cut the forecast for Brent crude prices in 2024 by nearly 9% to around $77.5/bbl with prices falling to the mid to low $70s during 2025.
• Brent is expected to hold in the $80-$90/bbl range this year with a forecast for the end of March lowered to $84/bbl, and June and September to $86/bbl, from the previous estimate of $95/bbl according to UBS.