Oil Summary at European Close: Crude Falls

Front month crude has recovered from its intra-day low of $81.72/bbl supported by a sharp decline in the US dollar after the release of the US February ISM services PMI. Crude briefly returned to gains on the day before easing back.

• Brent MAY 24 down -0.3% at 82.55$/bbl
• WTI APR 24 down -0.1% at 78.68$/bbl
• S&P Global US Services PMI final was higher than expected (52.3 vs. 51.4 est), Composite final PMI final (52.5 vs. 51.4 est). ISM Services Index was lower than expected (52.6 vs. 53.0 est)
• HSBC forecasts an oil market deficit of above 1mbpd in the second and third quarter of this year, including the newly announced Russian output cuts and a partial unwinding of OPEC+ cuts starting from July.
• OPEC+ appears more unified for now after the group’s extension of the voluntary output cuts, RBC said in a note.
• Kazakhstan’s crude oil production in February fell by 0.9% on the month to 1.564mbpd, sources told Reuters, above its OPEC+ quota of 1.468mbpd.
• Kazakhstan is exploring exporting up to 2m mt of oil to Germany via the Druzhba pipeline in 2024, according to Energy Minister Almasadan Satkaliev.
• China’s Sinochem bought one VLCC of around 2mn barrels of CPC Blend for end-March to early-April loading.
• Turkey’s Dortyol oil terminal will stop accepting Russian oil imports amid an increase in sanctions pressure by the US, operator GTS said, cited by Reuters.
• Iraq's breakeven oil price is expected to exceed $90/bbl in 2024 on higher spending according to the IMF via S&P Global.
• Traders are more optimistic on higher freight rates in March, amid the emergence of more cargoes seeking VLCCs for Persian Gulf – East route, according to Platts.