The Mar’25 Brent futures contract has seen strength this morning, increasing from $78.60/bbl at 0700 GMT up to $79.25/bbl at 0905 GMT, before tapering off to $79.15/bbl at 1100 GMT (time of writing). API data showed that US crude inventories rose by 0.96mb in the week ending 17 Jan, compared to an API draw of 2.6mb the week prior. Meanwhile, gasoline inventories increased by 3.23mb and distillates stocks rose by 1.88mb. In the news today, Asian refiners, including Chinese teapots and processors in Singapore and South Korea, are either cutting rates or considering it after US sanctions on Russia hiked crude oil prices, as per Bloomberg. Independent refiners in Shandong province, China, are the hardest hit after sanctions crippled flows of ESPO from the Pacific port of Kozmino, with run rates at these refineries recorded at around 50.7% this week. In other news, Indian refiner Bharat Petroleum (BPCL) has been unable to get Russian crude cargoes for March delivery, highlighting the impact of stringent US sanctions, Bloomberg reports. BPCL’s finance chief, Vetsa Ramakrishna Gupta, said “crude availability is not an issue” during an analyst conference call, but “only the commercial benefits of Russian crude may not be available”. Finally, NATO Secretary General Mark Rutte called for the US to continue supplying weapons to Ukraine and said Europe will provide funding, as per Reuters. The NATO chief said the alliance must invest more and ramp up defence industrial production. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.76/bbl and $3.85/bbl, respectively.
