Red Sea Fars Fail to Provide Further Crude Upside Wednesday

Crude markets are trading flat Wednesday, balancing Middle East fears against less optimism about the scale of central bank cuts this year, while strong supply from places like the US and Russia also weigh on crude.

• Brent MAR 24 unchanged at 75.89$/bbl
• WTI FEB 24 down -0.1% at 70.31$/bbl
• Gasoil JAN 24 down -0.7% at 745.75$/mt
• WTI-Brent down -0.1$/bbl at -5.34$/bbl
• Oil prices had risen over $2/bbl earlier this week following further escalations involving US retaliation towards Houthi rebels and the arrival of an Iranian warship to the region over the weekend.
• Physical oil supplies are so far facing little disruption due to the escalations but there are fears further volumes could be diverted around the bottom of Africa adding time and money to the trade as well as holding up fleet capacity.
• Energy markets were dragged into the wider scale pessimism that struck markets Tuesday over building fears central bank cuts, particularly the US may not be as aggressive as priced in late last year.
• Brent MAR 24-APR 24 up 0.03$/bbl at 0.06$/bbl
• OPEC+ plans to hold the next Joint Ministerial Monitoring Committee meeting (JMMC) in the first week of February, delegates told Bloomberg Tuesday. The impact of tighter OPEC+ supply is expected to become apparent in the coming months if the latest cuts are adhered to.
• OPEC+ is expected to face difficulty introducing any further cuts if global demand shows any signs of weakness through 2024.
• API data is due at 4:30 p.m. (2130 GMT) on Wednesday, and the EIA is due at 11:00 a.m. (1600 GMT) on Thursday, delayed by a day due to the New Year's holiday on Monday.
• Chinese oil import quotas have been released at 179.01mn metric tons for 2024 according to consultancies including JLC and Longzhong. Chinese buyers had been more reluctant to buy up oil cargoes late into last year as they waited for this year’s quotas. More unusually, China offered most of the quota in nearly one go, rather than batches.
• Russia’s seaborne crude exports finished 2023 with a four-week average of 3.46m b/d, the highest since early November, according to Bloomberg.
• US gasoline crack down -0.1$/bbl at 17.4$/bbl
• US ULSD crack down -0.2$/bbl at 35.57$/bbl