Oil Summary at European Close: Crude Rebounds on Day

Crude prices have rebounded during the European afternoon trading, supported by a further fall in the USD strength.

• Brent JUN 24 up 0.9% at 87.76$/bbl
• WTI JUN 24 up 1% at 82.69$/bbl
• The US extended sanctions on Iran’s oil sector to include foreign ports, vessels and refineries that knowingly process or ship Iranian crude but analysts don’t expect the new measures to have a material impact on Iran’s crude exports, according to Bloomberg.
• Limited impact is expected on Iran’s oil exports from new US legislation according to FGE.
• The US is not incentivised to enforce sanctions, especially in an election year and risk higher energy prices according to Energy Aspects Director of Research Amrita Sen.
• Approved US aid for Ukraine may help to stop its attacks on Russian energy infrastructure according to RBC’s Head of Commodity Research Helima Croft.
• Russia’s seaborne crude exports maintained a multi-month high in the four weeks to April 21, according to Bloomberg.
• Asia has lost 920kbd of medium/heavy sour barrels in Q1 2024 y/y with more volumes at risk according to Vortexa.
• The oil market is going through a consolidation period but is genuinely tight and the chances of oil prices rising above $100/bbl are “extraordinarily high,” analyst Jeff Currie said to Bloomberg.
• An oil price rise above $100/bbl “would require a geopolitical event,” said Eric Robertsen at Standard Chartered but prices in the mid- to low-$90/bbl is “very plausible.”
• Brent price forecasts of $90/bbl in Q2, $92/bbl in Q3 and $87/bbl in Q4 are driven by soft near-term fundamentals and geopolitical risks, according to BNP Paribas.