The May’25 Brent futures contract gapped up overnight on market open this week to around $71.50/bbl, with prices remaining supported this morning around $71.45/bbl at 1055 GMT (time of writing). Crude oil prices saw bullish sentiment to start the week after US airstrikes on Houthi rebels, with the US Department of Defense stating these attacks will continue until the Houthis stop attacking vessels in the Red Sea. In the news today, Chinese refiners reported a 2.1% increase in production over the first two months of 2025 as holiday travel increased fuel demand, according to China’s National Bureau of Statistics. The increase came from primarily from state-owned refineries while we saw private operators reduce run rates in January and February. In addition, China made a rare draw on crude oil inventories in these months as refiners processed more oil and imports remained weak, according to Reuters calculations. While China does not disclose volumes of crude in strategic or commercial stockpiles, this was the first time since September 2023 that refiner processing exceeded available crude. Finally, President Trump said he aims to speak with President Putin on Tuesday, adding that there is “a very good chance” for a progress in negotiations this week, focusing on concessions of territory. At the time of writing, the May/June’25 and May/Nov’25 Brent futures spreads stand at $0.53/bbl and $2.64/bbl, respectively.
