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Petroleum industry

Brent Futures Rally Continues Amid Global Tensions and Inventory Worries

Strategic Insights

— 2 min read

The Brent futures market rallied, confirmed by stable prices at the upper end of a $1.17 trading range over the week, despite concerns about US gasoline stocks and rising Middle East tensions. However, a bearish inventory report on March 24 put pressure on prices. Refining activity remained muted, with most trades restricted to light volume parcel trades. Gasoline prices strengthened, benefiting refining margins, although some remained negative.

Key Takeaways:

  • The Brent futures market maintained its rally, with prices holding steady at the upper end of a $1.17 trading range over the week.
  • Continuing concerns about low US gasoline stocks and rising tensions in the Middle East initially countered market weakness.
  • A bearish US inventory report on March 24 showed a 7.5 million bbl increase in crude stocks, temporarily putting prices under pressure.
  • Refining activity was muted, with most trades limited to light volume parcel trades in Platts "window."
  • Gasoline prices strengthened, benefiting refining margins, although some remained negative.
  • Urals c.i.f. Augusta, Italy was assessed at dated Brent minus $2.80, indicating continued downward pressure on Urals prices.
  • Exports out of Novorossiysk declined by 94,400 metric tons to 812,000 tons, with 13 ships at anchor waiting to load 1.05 million tons.
  • The CPC terminal exported 351,600 tons, while Odessa managed 205,200 tons, and Batumi lifted 351,600 tons.
  • Baltic ports exported 797,800 tons, a decline of 166,400 tons, with the port of Primorsk accounting for 178,600 tons.

Statistics:

  • Brent futures prices held steady at the upper end of a $1.17 trading range over the week.
  • US gasoline stocks remain a concerning factor, with inventory report data indicating a 7.5 million bbl increase in crude stocks.
  • Refining activity remains muted, with most trades limited to light volume parcel trades.
  • Gasoline prices strengthened by 70o/bbl, benefiting refining margins despite some negative margins remaining.
  • Urals c.i.f. Augusta, Italy was assessed at dated Brent minus $2.80, indicating continued downward pressure on Urals prices.
  • Exports out of Novorossiysk declined by 94,400 metric tons to 812,000 tons.
  • 13 ships are currently at anchor, waiting to load 1.05 million tons.
  • Baltic ports exported 797,800 tons, a decline of 166,400 tons.

Sources:

  • "May Brent futures confirmed the rally started on Mar. 17 by holding at the upper end of a $1.17 trading range over the week." - [1]
  • "Physical differentials in the Atlantic Basin have come off their year-highs but still sizzle with Dated Brent traded at May BFO plus $1 and Forties offered at dated Brent plus 90o." - [1]
  • "Urals c.i.f. Augusta, Italy was assessed at dated Brent minus $2.80." - [1]
  • "Exports out of Novorossiysk declined by 94,400 metric tons to 812,000 tons on 10 tankers -- a modest loss considering that port operations were disrupted for three days because of bad weather." - [1]

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