Oil Summary at European Close: Crude Falls Sharply

Crude has fallen sharply during the day to its lowest since Jan. 4 amid bearish outlooks for demand. Weak US demand sentiment, a reduction in Saudi OSP and strong non-OPEC supply continue to weigh on prices while fund net long positions fell last week.

• Brent MAR 24 down -3.7% at 75.83$/bbl
• WTI FEB 24 down -4.4% at 70.56$/bbl
• Bloomberg carrying headline that major containership Hapag-Lloyd has not made a deal with Houthis for safe Red Sea passage.
• Saudi Arabia cut all official selling prices for all regions for February, with the price for Arab Light crude to Asia falling to the lowest level since November 2021, a price list showed.
• Libya’s National Oil Corporation (NOC) announced a force majeure with immediate effect for its Sharara oilfield on Sunday due to recent ongoing protests that began hitting production last Wednesday.
• Global crude floating storage held on tankers stationary for at least 7 days rose to 83.69mn bbls as of January 5 - up 2.1% from 81.94mn bbls a week prior according to Vortexa.
• Heavy sour crude supply to the USGC could tighten as major projects in Canada and Mexico draw supply away, Argus said.
• Tanker freight rates for routes involving transit via the Red Sea have surged m/m according to Vortexa.
• Tightening fleet capacity, geopolitical tensions, and stronger crude exports should boost tanker freight in 2024, despite OPEC+ cuts and slowing demand growth, Platts said.