Upside Pressure to Crude Markets Resumes After US Fed and EIA Data

Upside pressure on crude has returned after a pull back yesterday with the US Fed not ruling out a cut in May/June and after EIA data showed US crude and gasoline inventory draws. Added support comes from a weaker USD index down a further 0.2% today after a 0.4% fall yesterday.

• Brent MAY 24 up 0.5% at 86.4$/bbl
• WTI MAY 24 up 0.5% at 81.65$/bbl
• Gasoil APR 24 up 0.4% at 831$/mt
• WTI-Brent down 0.04$/bbl at -4.75$/bbl
• The Fed continues to expect three 25bp rate cuts this year after keeping rates on hold yesterday which has helped risk appetite and improved the demand outlook for crude.
• EIA reported US crude stocks drew by 1.95mbbls last week and in line with expectations driven by a further recovery in US refinery utilisation rates. Implied gasoline demand continued to rise faster than the seasonal trend back to near normal levels.
  • Brent MAY 24-JUN 24 up 0.05$/bbl at 0.62$/bbl
  • Brent JUN 24-DEC 24 up 0.08$/bbl at 4.06$/bbl
• Time spreads are following the front month futures and still up on the week with concern for a potential market deficit due to OPEC+ cuts and improved global demand and with an increase geopolitical risk premium from attacks on Russia energy infrastructure.
• Gasoline cracks found some support following the EIA data release showing a decline in gasoline inventories by 3.31mbbls. Diesel cracks continue to pull back after EIA data showed weekly implied demand increased but the four week average remains below the previous five year seasonal range.
  • US gasoline crack down 1.1$/bbl at 31.72$/bbl
  • US ULSD crack down 0.3$/bbl at 30.51$/bbl