Rising Geopolitical Tensions and Supply Disruptions Support Oil

Oil is higher on Monday supported by rising geopolitical tensions as well as more positive outlooks for demand this year and some tighter supply dynamics.

• Brent MAY 24 up 0.4% at 85.81$/bbl
• WTI MAY 24 up 0.5% at 81.02$/bbl
• Gasoil APR 24 up 0.2% at 825.75$/mt
• WTI-Brent down -0.02$/bbl at -4.8$/bbl
• Russia was struck by a terrorist attack in Moscow Thursday claimed by ISIS but Putin has hinted at Ukrainian involvement.
• Tensions had already been rising after continued Ukrainian drone strikes on Russian refining infrastructure this month which has knocked domestic runs to a 10-month low according to Bloomberg sources.
• At least seven Russian refineries have been targeted by drones just this month. ANZ Research said about 12% of Russian processing had been impacted.
• Alongside the Ukraine/Russia conflict, hopes for an Israeli ceasefire in the Middle East are receding while Houthi attacks on vessels passing the Red Sea remain a persistent issue for global shipping.
• Brent MAY 24-JUN 24 unchanged at 0.6$/bbl
• Brent JUN 24-JUL 24 up 0.02$/bbl at 0.7$/bbl
• Indian refiners are refusing to take Sovcomflot related Russian oil cargoes, in an increasing sign of sanction effectiveness, raising fears of Russian barrels being pulled off the market.
• Money managers’ net-long positions on Brent have risen to the highest in more than a year.
• US diesel cracks slipped back last week as US refinery capacity comes back online from Spring maintenance while Kpler figures showed Russian diesel supplies piling up at sea (at 6.2mn bbls.) It forecasts European refinery maintenance to peak at 1.2mn bpd next month.
• US gasoline crack up 0$/bbl at 33.22$/bbl
• US ULSD crack up 0.1$/bbl at 30.3$/bbl